EURUSD on Friday dropped -0.29% to 1.07930. Week ending 2024-10-25 moved lower by -0.7%. What you need to know.

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As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.

EURUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.29%	-31.8 Pips
Week 2024-10-25	-0.7%	-75.6 Pips
October	-3.09%	-343.6 Pips

Upcoming key events for the new week (London Time)

  Wed 09:00 AM GDP (3-mth)
  Wed 10:00 AM GDP (seasonally adjusted) (3-mth)
  Wed 12:30 PM GDP annual rate
  Wed 01:00 PM CPI Inflation Rate (12-mth)
  Wed 10:00 PM Reformation Day
  Thu 10:00 AM Harmonised Index of Consumer Prices (HICP) (12-mth)
  Thu 12:30 PM Initial Unemployment Insurance Claims
  Thu 12:30 PM PCE Price Index, excluding food and energy (12-mth)
  Fri 12:30 PM Nonfarm Payroll Employment

What happened over the week

In October, the U.S. economy demonstrated a mix of positive and negative shifts. The University of Michigan reported an increase in the Index of Consumer Sentiment from 68.9 points in September to 70.5 points in October. The Index of Consumer Expectations, however, remained stable at 3% as reported in September. Durable Goods – New Orders witnessed a decline at -0.8% compared to the flat change in August as per the Census Bureau. On a positive note, Nondefense Capital Goods Orders excluding Aircraft saw a rise to 0.5% in September from a revised figure of 0.3% in August. Durable Goods Orders excluding Transportation fell to 0.4%, and Durable Goods Orders excluding Defense improved slightly from -1.3% in August to -1.1% in September. Initial Unemployment Insurance Claims dropped significantly to 227,000 from a revised 242,000, signaling an improvement in the labor market according to the Department of Labor.

In Germany, the economic sentiment showed positive momentum in October. The ifo Current Assessment rose to 85.7 points from 84.4 in September, and the ifo Expectations index increased to 87.3 points from 86.3. The ifo Business Climate Index also saw an upward trend, increasing to 86.5 points from 85.4 in September, as reported by the ifo Institute. Conversely, the Producer Prices Index (PPI) on a 12-month basis faced a downward trend, decreasing to -1.4% in September from -0.8% in August. The month-on-month PPI also registered a negative change, descending to -0.5% from 0.2%. These indicators, provided by the Federal Statistical Office (Destatis), highlight both growing confidence and deflationary pressures in the production sector.

For the Euro area, the Consumer Confidence Indicator slightly improved to -12.5 points in October from -12.9 in September, as per DG ECFIN.

Regarding the EURUSD pair, the currency saw a decline with a 0.29% drop to 1.07930 on Friday, marking a week decrease of 0.7%, hitting its lowest since July 3, 2024. The bounce in U.S. consumer sentiment alongside declining German PPI might pressure the euro lower versus the dollar. Market participants are likely to focus on upcoming high-impact data releases like GDP reports across major economies and inflation figures, which could prompt further volatility in the EURUSD pair depending on the outcomes. Strong U.S. GDP or significant changes in PCE Price Index and Nonfarm Payrolls will likely exert additional downward pressure on the euro, while weaker data or more pronounced deflationary signals from Germany might further weigh on the currency pair.

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

EURUSD on Friday dropped -0.29% to 1.07930. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2024-10-25, the pair dropped -0.7% or -75.6 pips lower. EURUSD hit 16-week low, lowest level since 03 July 2024.

Looking ahead on Monday, EURUSD looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook looks bearish, immediate support level is at 1.07573 (WS1) with break below could see further selling pressure towards 1.07216 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.08393 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 1.07626 would indicate selling pressure.

For the month of October, EURUSD is down by -3.09% or -343.6 pips lower.

Weekly key levels to watch out: