EUR/USD extends declines in wide-market Greenback rebound

• EUR/USD declined for a fourth straight day on Wednesday.
• Market sentiment keeps one foot in safe havens amid geopolitical uncertainty.
• Upbeat US jobs data limits hopes for further overweighted Fed rate cuts.

EUR/USD trimmed further into the bearish side on Wednesday, dragging Fiber bids further into the low end as markets grapple with an uncertain outlook on the Middle East and evaporating hopes for a follow-up jumbo rate cut from the Federal Reserve (Fed) in November.

This week's data show is purely US, with European datapoints strictly low-tier appearances from European Central Bank (ECB) policymakers. US Nonfarm Payrolls (NFP) loom ahead on Friday, and investors are gearing up for a high-impact print in US net job additions.

The US ADP Employment Change data for September exceeded expectations, with 143,000 new jobs added, surpassing the median forecast of 120,000 and the revised August figure of 103,000. Investors are now eagerly anticipating the official non-farm payrolls (NFP) report due on Friday to confirm these preliminary numbers.

Federal Reserve Chair Jerome Powell cautioned against interpreting the 50 basis point rate cut in September as a precursor to further aggressive rate adjustments. The Fed's Summary of Economic Projections (SEP) indicates a total of 50 basis points in rate cuts over the next several meetings. Market sentiment aligns with the Fed's projection, with the CME's FedWatch Tool showing a 60% probability of a 25 basis point rate cut in November, while 40% are still anticipating a larger 50 basis point cut.

In addition to the focus on Fed rate cuts, the domestic US manufacturing outlook is uncertain due to a strike by port workers affecting the movement of goods along the East and Gulf Coasts. Escalating tensions in the Middle East, triggered by Iran's missile strike on Israel in response to Israel's actions in Lebanon, are further contributing to market volatility. Investors are closely monitoring the situation to gauge Israel's response to the escalating conflict.

EUR/USD price forecast

Intraday price action has officially been trucked into the 50-day Exponential Moving Average (EMA), and despite a half-hearted showing from Fiber bulls, the pair remains on the north side of the key moving average. EUR/USD continues to churn in the 1.1050 neighborhood, but a notable lack of a technical recovery leaves short flows in control of the pair with sellers targeting the 1.1000 round figure.

EUR/USD daily chart