EUR/USD falls below 1.1600 as Dollar strengthens ahead of US NFP

• EUR/USD retreats to 1.1589 as traders buy Dollar amid expectations the Fed may keep rates unchanged in December.
• US government reopening fuels volatility ahead of NFP and earnings, with AI-bubble fears boosting safe-haven flows.
• ECB's de Guindos says inflation is converging toward target but warns rising tariffs and sovereign debt remain risks.

The EUR/USD registers loses during the North American session down 030% as the Greenback enjoys a healthy recovery on speculation that the Federal Reserve might hold rates unchanged. The pair trades at 1.1589 after reaching a daily high of 1.1624.

Euro slips 0.30% as rising risk aversion and renewed Fed caution lift the Greenback into the new trading week

Risk aversion keeps the US Dollar bid as the US government reopening unleashes a flood of data, led by the release of the Nonfarm Payrolls report on Thursday. The US Bureau of Labor Statistics (BLS) will release those figures, and the Real Earnings print on Friday. Meanwhile, investors bought Greenback amid fears of a possible AI bubble, with NVIDIA set to release earnings on Wednesday, which could set markets mood ahead of US crucial data.

The US schedule is light on Monday, except for Federal Reserve officials. Vice-Chai Philip Jeffers was slightly dovish, while Fed Governor Christopher Waller supports the continuation of the easing cycle at the December's meeting.

Earlier, the New York Fed released the Empire State Manufacturing index for November, improving with current business conditions faring better than expected

European Central Bank Vice President Luis de Guindos expressed confidence that Eurozone inflation is on track to converge toward the ECB's price-stability target. Still, he warned that rising tariffs and elevated sovereign debt levels pose risks and potentially impact an abrupt shift in market mood.

Daily market movers: Euro slide on broad US Dollar strength

• The US Dollar Index (DXY), which tracks the buck's value against a basket of six currencies, is up 0.20% at 99.47.
• The New York Fed's latest survey showed a stronger-than-expected rebound in current manufacturing conditions, with gains in new orders and employment, while prices paid continued to ease. However, the six-month business outlook softened notably, falling to 19.1 from 30.3, signaling a decline in forward-looking confidence.
• The Fed Vice Chair Philip Jefferson said upside risks to inflation have likely diminished, while downside risks to the labor market have increased. He noted that firms remain hesitant to either hire or fire, and characterized current monetary policy as "somewhat restrictive."
• Fed Governor Chritopher Waller said that a weak labor market justifies a rate cut in the December meeting. He added that once the impact of tariff is excluded, inflation would get closer to the Fed's 2% target.
• Money markets have shifted toward a more hawkish outlook, with CME FedWatch data showing a 43% probability of a 25-basis-point cut at the December meeting--implying a 57% chance the Fed holds rates steady.

EUR/USD technical outlook: Tumbles below 1.1600, traders eye 1.1550

EUR/USD continues to trade with a bearish tone, with sellers gaining control pushing the exchange rate towards the 50-day Simple Moving Average (SMA) at 1.1581. The Relative Strength Index (RSI) made a U-turn, edging lower, suggesting a pickup in bearish pressure. A clear breach of the 1.1550 would open the door toward the 1.1500 level.

On the upside, the EUR/USD must reclaim 1.1600 if buyers would like to regain the upper hand. Once done, the next stop is the 50-day SMA at 1.1656, followed by the 100-day SMA at 1.1659. On further strength, the next resistance is 1.1700.