EUR/USD climbs as weak US jobs data fuels Fed cut bets

• EUR/USD rises 0.45% to 1.1545 after rebounding from daily lows near 1.1486 amid broad USD weakness.
• Challenger report shows 150K US job cuts in October, the sharpest monthly decline in two decades.
• Fed officials maintain dovish to neutral tone as traders price in higher odds of a December rate cut.

EUR/USD recovers some ground on Thursday, post gains of 0.45% after bouncing off daily lows of 1.1486 as the Greenback weakened. A soft jobs data in the US increased speculation for a Fed rate cut at the December meeting. The pair trades at 1.1545 at the time of writing.

Euro rebounds above 1.15 as soft US employment figures and government shutdown weigh on Dollar sentiment

The US government shutdown keeps traders leaning on private companies releasing economic data, as was the case during the day. The Challenger report showed that employers cut over 150K jobs in October, the largest reduction for the month in 20 years, revealed Gray & Christmas. Consequently, money markets set their expectations that the Fed would continue to ease policy at the December meeting.

A bunch of Federal Reserve officials crossed the wires, led by regional Fed Presidents Beth Hammack of Cleveland, New York John Williams and Chicago's Austan Goolsbee. Additionally, Fed Governors Stephen Miran and Michael Barr, kept their dovish and neutral stances, respectively.

In Europe, Retail Sales for the Eurozone (EZ) missed estimates of a 0.2% MoM increase, contracted by 0.1%. In the twelve months to September, Sales dipped from 1.6% in August to 1% YoY, revealed Eurostat.

Daily digest market movers: Euro surges on US Dollar weakness

• The US Dollar Index (DXY), which tracks the performance of the American currency against other six, slumps 0.42% down to 99.73.
• Cleveland Fed President Beth Hammack said it is "not obvious" the Fed should cut rates again given current inflation levels, noting that financial conditions remain accommodative. She added that despite that the labor market appears fragile, she expects the unemployment rate to diminish.
• Fed Governor Michael Barr said inflation progress has been made "but there is still work to do," emphasizing that the central bank must ensure the job market remains solid.
• New York Fed President John Williams remarked that the natural rate of interest is difficult to pinpoint, with model-based estimates for the US neutral rate hovering near 1%.
• Chicago Fed President Austan Goolsbee added that the lack of official inflation data during the government shutdown "accentuates" his caution toward additional rate cuts.

Technical outlook: EUR/USD to remain sideways below 1.1600

EUR/USD reclaimed the 1.1500 milestone on Thursday, poised to test the 20-day Simple Moving Average (SMA) at 1.1591 ahead of 1.1600. Although the Relative Strength Index (RSI) is aiming upwards, remains beneath its neutral level, an indication that sellers are in charge.

However, if EUR/USD rises past 1.1600, buyers could test 1.1700. On the flip side, the path of least resistance, the first support would be the 1.1500. A breach of the latter will expose .1450, followed by 1.1400. A decisive break below these levels would expose the August 1 low at 1.1391 and the 200-day Simple Moving Average (SMA) near 1.1344.