EUR/USD finds some footing as the US Dollar rally falters

• The Euro finds some support at 1.1600, but upside attempts remain frail.
• Trump refuses to meet Democratic policymakers, and the US government shutdown continues with no end in sight.
• The US Dollar rally loses momentum as the focus shifts to the prospects of Fed interest rate cuts.

EUR/USD posts marginal gains on Wednesday, to snap a three-day losing streak, and trades near 1.1610 after hitting one-week lows right below 1.1600 earlier on the day. The US Dollar (USD) has lost some of its recent shine, as the Gold sell-off halts and the US government shutdown continues without prospects of an immediate solution.

On Tuesday, US President Donald Trump rebuffed meeting requests by Democratic lawmakers from the previous day, saying that he will not meet them until the government reopens. Meanwhile, the shutdown enters its fourth week as the Senate failed to pass a funding resolution for the 11th time on Monday.

In the absence of key macroeconomic releases in the Eurozone and the US, the speeches of European Central Bank (ECB) policymakers, including President Christine Lagarde and Vice President Luis de Guindos, and Federal Reserve (Fed) officials will be the unique distraction for traders. These speeches, however, are unlikely to provide any new clues on the central banks' near-term monetary policies.

Daily digest market movers: Fed monetary easing hopes weigh on the USD

• The US Dollar lost momentum as the latest episode of the Sino-US trade war went into the back burner, and investors shifted their focus once again to the protracted US government shutdown and the prospects of a series of interest rate cuts by the Federal Reserve.
• A survey by Reuters showed on Tuesday that most analysts expect the Fed to cut rates by 25 basis points at the October 28-29 meeting and a further quarter-point in December. 25 of 33 economists show concerns that the central bank might go too far with monetary easing and set a very low terminal rate by the end of next year.
• US President Trump affirmed on Tuesday, that Republicans "will not be extorted" by Democrats to bend to their demands, which suggests that this government closure is likely to be one of the largest in history. Such an extended closure will likely take a toll on US GDP growth and undermine investors' confidence in the US Dollar.
• Earlier this week, Trump announced that he will meet Chinese President Xi Jinping in South Korea next week and that he expects to reach a fair deal. These comments have ditched fears of a US-China trade war, at least for now, and triggered a sharp sell-off in precious metals.

Technical Analysis: EUR/USD finds support at the 1.1600 level

EUR/USD has found support at the 1.1600 level, but the broader trend remains bearish, following the rejection at 1.1730 last week. Technical indicators are in negative territory. The 4-hour Relative Strength Index is below 40.00, which highlights the fragility of the pair's recovery attempt.

Upside attempts remain subdued, well below Tuesday's highs, in the area of 1.1650. The pair should break above that level to shift the focus to the October 17 high, at 1.1728. Further up, the October 1 high, around 1.1775, comes into focus.

On the other hand, a confirmation below the intra-day low of 1.1598 would expose the October 9 and 14 lows in the area of 1.1545 ahead of the channel bottom, now around 1.1460.