EUR/USD holds steady as weak U.S. jobs data offsets shutdown risks

• EUR/USD remains subdued after US private hiring slumped in September, exposing labor market weakness.
• Fitch Ratings says shutdown trims U.S. GDP growth by 0.1-0.2% weekly but leaves debt credit rating outlook unchanged.
• Eurozone PMI beat expectations and inflation ticked higher, yet ECB seen holding policy steady after Lagarde's cautious tone.

EUR/USD is steady late during the North American session as investors digest a soft jobs report and shrugs off the shutdown of the US government. The lack of an agreement between the White House and Democrats would prolong the shutdown and delay US economic data releases. The pair trades at 1.1720 unchanged.

Euro trades flat near 1.1720 with investors balancing soft ADP print, government funding stalemate, and steady Eurozone data

US ADP National Employment Change in September was dismal and highlighted the weakness of the labor market. Business activity in the manufacturing sector in the US, improved but contracted for the seventh straight month.

Regarding political turmoil in the US, Vice-President JD Bance said that he does not think the shutdown will last long, vowing to do everything possible in the coming weeks to ensure people receive essential services.

Meanwhile, Fitch Ratings said that a government shutdown does not have near-term impact on the "AA+ stable" creditworthiness of US debt. The agency revealed that the shutdown is estimated to reduce GDP growth by 0.1-0.2% per week.

In the Eurozone, the HCOB Manufacturing PMI for September exceeded estimates, while the Harmonized Index of Consumer Prices (HICP) for the bloc ticked up. Despite this, the European Central Bank (ECB) is expected to remain on hold after President Christine Lagarde said that the risks to inflation "appear quite contained in both directions."

Daily market movers: Fed's Goolsbee hawkish stance, to cap Euro's advance

• Chicago's Fed President Austan Goolsbee said that he is worried about inflation, which remains above the central bank's 2% target and added that the shutdown does not help as key economic data would be delayed.
• ADP reported that private sector employment unexpectedly contracted by 32,000 in September, following August's downwardly revised loss of 3,000 jobs. Markets had anticipated an increase of at least 50,000 positions.
• Meanwhile, the ISM Manufacturing PMI edged up to 49.1 from August's 48.7, slightly above the 49.0 forecast. Still, September marked the seventh straight month of contraction in the sector.
• Fitch Ratings said the US Dollar's status as the world's leading reserve currency is expected to remain intact despite heightened policy uncertainty and added that reversing previously enacted Medicaid cuts would have little effect on near-term deficit projections, with most of the fiscal impact not expected until after 2028.
• Europe HICP expanded by 2.2% in September, as expected but registered above 2% in August. Core HICP was steady at 2.3% YoY, aligned with estimates. At the same time, the Eurozone HCOB Manufacturing PMI rose from 49.5 to 49.8 in September as expected.

Technical outlook: EUR/USD steadies at around 1.1730 awaiting a fresh catalyst

EUR/USD has held firm above the 1.1700 level for four consecutive sessions but continues to struggle below 1.1750, keeping upside momentum in check. The Relative Strength Index (RSI) is flattening near the neutral 50 mark, signaling indecision.

If EUR/USD breaks above 1.1740, it would expose resistance at 1.1800, followed by the yearly peak at 1.1918. On the downside, a drop below 1.1700 would target 1.1650, with further support at the 100-day SMA near 1.1611.