EUR/USD Forecast: German GfK Miss at -22.3, All Eyes on US GDP Data
Euro steadies after GfK Consumer Climate index comes in at -22.3 for October The euro is holding steady on Thursday after Germany’s GfK...
Quick overview
- The euro steadies at $1.1745 after Germany's GfK Consumer Climate index improves slightly to -22.3 for October.
- Traders are awaiting the ECB Economic Bulletin for insights on the central bank's outlook amid ongoing cost-of-living pressures.
- The US dollar weakens as markets anticipate a 92% chance of an October rate cut following Fed Chair Jerome Powell's comments.
- EUR/USD technical analysis shows support at a rising trendline, with potential bullish targets if it breaks above the 50-SMA.
Euro steadies after GfK Consumer Climate index comes in at -22.3 for October
The euro is holding steady on Thursday after Germany’s GfK Consumer Climate index came in at -22.3 for October, slightly better than the forecast of -23.3 and an improvement from the previous -23.5. While the figure is still deeply negative, the small uptick suggests a slight improvement in consumer sentiment in Europe’s largest economy. But cost-of-living pressures and weak business activity mean the euro’s recovery may be fragile.
Traders will now look to the ECB Economic Bulletin later today for more guidance on the central bank’s outlook. Any signs of easing financial conditions could impact the euro in the short term.
Fed Outlook and US GDP in Focus
On the US side, the dollar has lost some steam after Fed Chair Jerome Powell’s recent comments. He said policymakers face a “tough balance” between cooling inflation and not hurting the labor market. Markets are pricing in a 92% chance of an October rate cut, according to the CME FedWatch Tool, up from 87% last week.
Today’s spotlight is on the final Q2 GDP print, expected to be 3.3% and the GDP price index 2.0%. Weekly jobless claims are projected at 233K, up from 231K last week, which suggests labor market resilience but leaves room for the Fed to be cautious. Stronger data could support the dollar, while weaker could extend EUR/USD’s rally.
EUR/USD Technical Analysis: Trendline Support Holds
EUR/USD is trading at $1.1745, just above a rising trendline that has held higher lows since early August. The 100-SMA at $1.1713 is close to this trendline and forms a key support area. Candlestick patterns show spinning tops around support, which means indecision rather than bearish pressure.
Momentum indicators agree. The RSI is 41, not oversold but showing divergence as price action hugs the trendline. A break above the 50-SMA at $1.1788 would be bullish, with targets at $1.1819 and $1.1859. Below $1.1710 risks a deeper pullback to $1.1691 and $1.1659.
Trade to Watch
For the trade, the zone to watch is $1.1725-$1.1740. Long here with stop below $1.1690 and bullish candlestick patterns like a hammer or engulfing candle. Upside targets at $1.1819 and $1.1859, which are previous resistance. If breaks the trendline, trade is invalid and more downside.
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