EUR/USD steady at 1.1720 as Dollar firm amid US shutdown

• EUR/USD dives as Dollar gains ground as US government shutdown halts key economic data releases.
• Dallas Fed Logan flags inflation trending higher, warns of risks, while the labor market shows further signs of cooling.
• Eurozone unemployment unexpectedly rises to 6.3%, adding pressure to ECB outlook as growth risks remain tilted lower.

EUR/USD remains steady during the North American session on Thursday, yet registering back-to-back bearish days as the US Dollar strengthens amid the ongoing government shutdown and the absence of US economic data releases like Initial Jobless Claims. The pair trades at 1.1719, down 0.09%.

Shared currency struggles for direction as traders eye ISM Services PMI and Fed speakers with NFP data likely delayed

Wall Street is poised to end the day in the green despite the lack of progress to reopen the US government. Data from Challenger, Gray and Christmas revealed that companies are expected to hire over 30,000 fewer people in September, as the labor market continues to cool down.

Dallas Federal Reserve (Fed) President Lorie Logan was hawkish, stating that inflation is above target and trending upward. Despite this, she recognized the risks on both sides of the dual mandate, adding that the labor market is cooling.

Given the backdrop, investors seem confident that the Fed will slash rates at the October 29 meeting, with odds standing at 96%, as revealed by the Prime Market Terminal interest rate probability tool.

In the meantime, the US Nonfarm Payrolls report is expected to be delayed, leaving traders adrift for the Institute of Supply Management (ISM) Services PMI for September and Fed officials crossing the wires.

Across the pond, Eurostat revealed that the Unemployment Rate rose from 6.2% in July to 6.3% in August, above estimates.

Daily market movers: EUR/USD slides on Fed's Logan hawkish comments, Dollar strength

• US employers announced 54,064 job cuts in September, down from 85,979 in August, according to Challenger, Gray & Christmas. Andy Challenger, senior Vice President at the firm, noted: "Right now, we're dealing with a stagnating labor market, cost increases, and a transformative new technology."
• Job openings in the US showed the labor market is slowing, yet vacancies rose from 7.21 million to 7.23 million in August. Digging into the data, the hiring rate edged down to 3.2%, the lowest level since June 2024, while layoffs remained at a low level.
• Bloomberg revealed that the US Supreme Court dismissed US President Donald Trump's order to oust Federal Reserve Governor Lisa Cook and allowed her to remain in her position at least until January, when the court is expected to hear Trump's arguments.
• ECB committee member, Martins Kazaks, reiterated that the bank's interest rates are at a "very appropriate level" and that they should remain unchanged unless further shocks occur.

Technical outlook: EUR/USD steadies at around 1.1710 awaiting a fresh catalyst

EUR/USD has remained steady above the 1.1700 figure during the last four trading days, yet it has failed to clear 1.1750, which could open the door for further gains. The Relative Strength Index (RSI) shows signs of being flattish near the 50 neutral level.

If EUR/USD clears 1.1740, the next resistance would be 1.1800, ahead of the yearly high of 1.1918. Conversely, a drop below 1.1700 would expose 1.1650, before challenging the 100-day SMA at 1.1610.