EURUSD on Friday rose 0.32% to 1.08650. Week ending 2024-10-18 moved lower by -0.55%. What you need to know.

EURUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.32%	34.3 Pips
Week 2024-10-18	-0.55%	-60.4 Pips
October	-2.44%	-271.6 Pips

Upcoming key events for the new week (London Time)

Thu 01:30 PM Initial Unemployment Insurance Claims

What happened over the week

In the United States, there has been a noticeable change in economic indicators as per the Census Bureau and the Philadelphia Fed. Building permits in September fell to 1.428 million from August’s 1.47 million, a sign of reduced future construction activity. Similarly, housing starts decreased slightly to 1.354 million from 1.361 million in the preceding month. Despite a general downturn in housing activity, the manufacturing sector showed a positive turnaround with an increase in the Manufacturing Business Outlook Survey to 10.3 points in October, up from September’s 1.7 points. Retail trade also improved, recording a 0.4% increase in September, higher than the 0.1% rise in August. Meanwhile, initial unemployment claims dropped to 241,000 for the week ending October 12, indicating a strengthening labor market, as reported by the Department of Labor.

In the Euro Area, as stated by Eurostat, economic activity has shown some positive sparks alongside continued challenges. The ECB’s decision to lower the main refinancing operations interest rate to 3.4% reflects efforts to stimulate economic growth amid low inflationary pressures; inflation, measured by the Harmonized Index of Consumer Prices, remained unchanged at -0.1%. In contrast, economic sentiment is improving, with the Euro Area ZEW Survey showing a sharp increase to 20.1 points from 9.3 points, bolstered by Germany’s indicator rising to 13.1 points in October. However, there is ongoing weakness in Germany’s economic situation, with the ZEW Survey reading decreasing to -86.9 points. Despite this, Eurostat’s data shows a robust increase in industrial production, with a 1.8% rise in August, compared to the previous negative performance.

The EUR/USD experienced a slight increase of 0.32% on the last trading day, reaching 1.08650. Yet, on a weekly basis, it declined by 0.55%. The contrasting economic signals from both regions could influence the currency pair moving forward. Improvement in U.S. economic indicators, particularly in the labor market and retail sector, could weigh on the Euro if the Federal Reserve signals a more hawkish stance. On the other hand, improved economic sentiment and industrial production in the Euro Area could support the EUR, especially if the ECB maintains an accommodative policy. Market participants will be attentive to upcoming U.S. initial unemployment insurance claims, which could provide further insight into the U.S. labor market’s health.

From X (Twitter)

Today we cut our key interest rates by 0.25 percentage points.

Inflation is the lowest it’s been in years. It is likely to go up again in the coming months before returning to our 2% target in 2025.

Read more https://t.co/hxJxxmvwVV pic.twitter.com/Juc9f08YuD

— European Central Bank (@ecb) October 17, 2024

What can we expect from EURUSD for the new week and what happened on Friday?

EURUSD on Friday rose 0.32% to 1.09. Price is below 9-Day EMA while Stochastic is falling in oversold zone. For the week ending 2024-10-18, the pair dropped -0.55% or -60.4 pips lower.

Looking ahead, EURUSD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bearish, immediate support level is at 1.08 (WS1) with break below could see further selling pressure towards 1.08 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.09 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.08 would indicate selling pressure.

For the month of October, EURUSD is down by -2.44% or -271.6 pips lower.

Weekly key levels to watch out:

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Christine Lagarde, Luis de Guindos: Monetary policy statement Source: European Central Bank
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Industrial production up by 1.8% in the euro area and by 1.3% in the EU Source: Eurostat
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In September 2024, the prices of frequently purchased goods sold in hyper and supermarkets decreased by 0.8% year on year Source: INSEE
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In September 2024, consumer prices decreased by 1.2% over one month and increased by 1.1% year on year Source: INSEE