EUR/USD clings to 1.1600 despite weekly pullback on trimmed Fed Cut bets

• EUR/USD slips 0.10% Friday but ends week up 0.51%, holding traction above key support.
• Fed officials lean hawkish, trimming December cut odds to 56%, though some cite labor market weakness.
• Eurozone Q3 GDP rises 0.2% QoQ and 1.4% YoY, offering modest support to the Euro.

The EUR/USD ended Friday with losses of 0.10% but the week finished on a higher note up 0.51% as risk appetite deteriorated amid growing speculation the Federal Reserve would pause its easing cycle next month. Nevertheless, the pair closed above the 1.1600 figure, paving the way for further upside.

Euro ends slightly lower Friday but posts weekly gains, supported by mixed Fed signals and steady Eurozone growth

Since Wednesday, the majority of Federal Reserve officials remained hawkish. Regional Fed bank presidents, led by Beth Hammack, Raphael Bostic, Alberto Musalem, Susan Collins, Neel Kashkari and Jeffrey Schmid favored a modestly restrictive monetary policy,

On the dovish front lie Fed Governor Stephen Miran, San Francisco Fed's Mary Daly, or even Governors Christopher Waller and Michelle Bowman, who said the labor market is deteriorating.

In the neutral stance lie the Fed Chair Jerome Powell and New York Fed John Williams. However, the Fed Chair Powell revealed that December's cut was not a a foregone conclusion, keeping his options open amid the lack of economic data.

Money market had priced in a 56% chance for a 25-basis points rate cut, down from around 70% a year ago, revealed Prime Market Interest Rate Probability tool.

In Europe, data revealed that the economy grew 0.2% on a quarterly basis, in Q3. The Gross Domestic Product (GDP) year-over-year (YoY) was upwardly revised from 1.3% to 1.4%.

Daily market movers: Euro's gave back gains on Fed's hawkish comments

• The US Dollar Index (DXY), which tracks the performance of the buck's value against other six currencies, rose a modest 0.08% at 99.31 as of writing.
• On Friday, Federal Reserve's Governor Stephen Miran and Kansas City Fed President Jeffrey Schmid, crossed thew wires. The former doubled down on his dovish stance, arguing that recent data "should make the Fed more dovish, not less," and warning that policymakers risk making mistakes if they rely too heavily on backward-looking indicators.
• Conversely, Schmid reiterated the reasoning behind his dissent against the latest rate cut, saying: "My rationale for dissenting against the rate cut at the last meeting continues to guide my thinking heading into December." He added that he views the current stance of monetary policy as "only modestly restrictive," which he believes is appropriate.

EUR/USD technical outlook: Holds firm at around 1.1600

EUR/USD maintain a bearish tone with buyers unable to decisively breach the 50-day Simple Moving Average (SMA) at 1.1659. Short-term momentum has improved, with the Relative Strength Index (RSI) ticking higher and signaling strengthening bullish pressure. A decisive break above the 50-day SMA would expose the 1.1700 level.

Conversely if EUR/USD tumbles below 1.1600 would put immediate support at the 20-day SMA near 1.1583, followed by 1.1500. A breach of those levels would expose August 1 cycle low of 1.1391 as the next bearish target.