EUR/USD rises to 1.1590 as weak US data pressures Dollar

• EUR/USD rises as Dollar weakens on disappointing US data, rebounding from earlier session lows.
• ADP report shows further labor market cooling, while NFIB optimism index hits yearly low.
• Senate passes stopgap funding bill; traders await House vote as Fed officials send mixed signals.

The Euro advances during the North American session posting gains of 0.30% as the Greenback tumbles on worse than expected US ADP jobs data and business turning pessimistic on the economic outlook. The EUR/USD trades at 1.1590 after bouncing of daily lows of 1.1547.

Euro gains as soft ADP report, business pessimism reinforce bets for a December Fed rate cut

The US economic docket remains scarce, yet Automatic Data Processing (ADP) released the weekly ADP Employment Change, which reinforced the thesis that the labor market is weakening. Also, the NFIB Small Business Optimism Index fell to its lowest level in the year.

Late on Monday, the US Senate passed the funding stopgap bill on a 60-40 vote last night. Now is the turn for the House of Representatives, with House Speaker Mike Johnson saying that he expects the funding will pass quickly.

In the meantime, the lack of economic data leaves traders leaning to Fed speakers, which were absent on Tuesday, but crossed the wires on Monday. Fed Governor Stephen Moran struck to its dovish stance eyeing a 50-basis point rate cut at the December meeting. Contrarily, St. Louis Fed Alberto Musalem revealed that inflation is closer to 3% than 2%, that the labor market has cooled orderly and that monetary policy is closer to neutral than modestly restrictive.

In Europe, the German ZEW survey in November showed that German investors are pessimistic about the economic outlook, even though current conditions improved beneath estimates. Across the whole bloc, the index improved beyond forecasts.

Daily market movers: EUR/USD to extend gains on monetary policy divergence

• The US Dollar Index (DXY), which tracks the performance of the American currency against other six, dipped on concerns about the weakness of the US labor market, is down 0.15% at 99.47.
• The NFIB Small Business Optimism Index slipped to 98.2 in October but remained above the 52-year average of 98. Meanwhile, the Uncertainty Index dropped 12 points from September to 88 -- its lowest level so far this year -- suggesting improved clarity among business owners despite lingering economic headwinds.
• The looming US government reopening keeps speculation on when the Bureau of Labor Statistics (BLS) will reveal the September Nonfarm Payrolls report. Goldman Sachs expect the NFP report to be unveiled at around November 18 or 19.
• Monetary policy divergence supports further Euro upside as the European Central Bank (ECB) is projected to keep rates unchanged through 2027. Conversely, the Fed is expected to continue its easing cycle, with traders pricing in 125 bps of cuts toward the end of 2026.

Technical outlook: EUR/USD consolidates beneath 1.16

The EUR/USD retains a bearish undertone despite sellers struggle to drive the pair toward the 200-day Simple Moving Average (SMA) at 1.1350. The Relative Strength Index (RSI) shows that buyers are gathering momentum, but the index is still below its 50 neutral level, an indication that bears remain in charge.

A drop below 1.1500 would expose the August 1 cycle low at 1.1391, reinforcing the broader downtrend. On the flipside, a sustained breach of 1.1600, paves the way for challenging 1.1700.