EUR/USD: Bulls Break Key Resistance as Shutdown Ends
Key Highlights
- Euro extends three-day rally to fresh two-week highs near 1.1660
- Dollar weakness persists despite uptick in Treasury yields
- Uncertainty around missing economic data creates complex landscape
Market Overview EUR/USD continued its impressive advance Thursday, breaking decisively through previous resistance levels to reach fresh two-week highs near 1.1660. The pair has now risen for three consecutive sessions, benefiting from persistent Dollar weakness as the historic six-week government shutdown officially ended when President Trump signed the funding bill Wednesday evening.
The resolution brings unexpected complications, however, as White House press secretary Karoline Leavitt made the surprising announcement that key economic reports from the shutdown period—including October jobs and inflation data—may never be released. She also indicated the shutdown could lower Q4 economic growth by up to 2 percentage points, though most economists expect minimal impact.
This data vacuum has created significant uncertainty about the Fed’s ability to make informed policy decisions, with markets now pricing just a 51% chance of a December rate cut—down sharply from 62.9% a day earlier. Despite this recalibration, the Dollar Index remains on the back foot, challenging the 99.00 zone at fresh monthly lows.
Today’s Eurozone Trade Balance and Q3 GDP figures will provide crucial insight into European economic resilience. Strong readings would validate the ECB’s current policy stance and potentially push EUR/USD through 1.1685 resistance, while disappointing figures could trigger profit-taking after the impressive three-day rally.
Technical Outlook (4H)
- Current Price: 1.1632
- Stochastic approaching overbought territory—signals strong momentum
- Price firmly above 20-period moving average—maintains bullish structure
- Three-day advance creates higher trading range—bullish continuation pattern
Key Levels
| Resistance | Support |
|---|---|
| 1.1685 | 1.1570 |
| 1.1724 | 1.1530 |
Fremora Takeaway EUR/USD’s powerful three-day advance demonstrates strong bullish momentum, though the technical setup suggests consolidation may soon emerge. The fundamental backdrop remains supportive, with the Dollar at monthly lows despite shifting Fed expectations. However, Carol Schleif’s warning about potential “market chop over the coming weeks as the government gears and economic data presses get turning again” highlights the volatile road ahead. The pair’s ability to hold above 1.1570 and the 20-period moving average will determine whether this rally has staying power. Today’s Eurozone data provides the next catalyst—strong figures could push EUR/USD toward 1.1700, while disappointments might trigger a pullback to test newly established support.
GOLD (XAU/USD): Bulls Weather Equity Rout as Metal Holds Above $4,170
Key Highlights
- Gold retreats from three-week peaks near $4,250 but maintains support
- Precious metal shows resilience despite sharp drop in rate cut expectations
- Brutal equity selloff fails to significantly pressure prices
Market Overview Gold surrendered initial gains near $4,250—representing three-week highs—and returned to the $4,170 region Thursday as technology stocks faced brutal selling pressure and investors recalibrated Federal Reserve rate cut expectations.
The pullback occurred amid one of the worst days for US equity markets since October. The Dow Jones plunged 797.60 points (1.65%), the S&P 500 shed 1.66%, and the Nasdaq Composite suffered a 2.29% decline as stretched technology valuations came under renewed scrutiny. Disney’s nearly 8% drop on mixed earnings added to the negative sentiment across communication services.
What’s particularly notable is gold’s resilience despite the sharp recalibration in Fed rate cut expectations. Markets are now pricing just a 51% chance of December easing—down from 62.9% a day earlier according to the CME FedWatch Tool. This sudden shift typically represents a headwind for gold, as reduced expectations for near-term easing increase the opportunity cost of holding non-yielding assets.
The catalyst appears to be growing recognition of the Fed’s challenging position following the shutdown resolution. The White House’s announcement that key October economic reports may never be released creates unprecedented uncertainty about the central bank’s ability to make data-dependent decisions.
Ron Albahary from Laird Norton Wealth Management characterized Thursday’s equity pullback as “healthy” and a “natural consolidation,” suggesting some market participants view the selloff as normal correction rather than the start of a serious downturn—a view that could support continued gold positioning as portfolio insurance.
Technical Outlook (4H)
- Current Price: 4174.56
- Stochastic attempting to cross higher from oversold—potential bottoming signal
- Price consolidating slightly above 20-period moving average—maintains structure
- Pullback from three-week highs suggests moderation in momentum
Key Levels
| Resistance | Support |
|---|---|
| 4273.07 | 4097.29 |
| 4356.40 | 4017.82 |
Fremora Takeaway Gold’s consolidation near $4,175 demonstrates impressive resilience given the brutal equity market selloff and sharp recalibration in Fed rate cut expectations. The technical picture suggests potential stabilization after Thursday’s retreat from three-week highs, with the Stochastic attempting to cross higher from oversold territory. The unprecedented uncertainty about missing October economic data creates a supportive environment for portfolio hedging, helping offset the headwind from reduced near-term rate cut odds. Today’s Fed speakers (Logan and Bostic) could provide the next directional catalyst—any acknowledgment of the data challenges would support gold, while hawkish pushback might pressure prices toward $4,100. The uptrend remains intact while price holds above $4,097 and the 20-period moving average.
GBP/USD: Sterling Finds Footing Despite Brutal Equity Selloff
Key Highlights
- Pound reverses two days of losses to briefly reclaim 1.3200
- Cable shows resilience amid worst equity selloff since October 10
- UK calendar clear until November 19 inflation report
Market Overview GBP/USD reversed two consecutive daily drops Thursday, briefly surpassing the 1.3200 barrier amid further Greenback weakness before pulling back to consolidate around 1.3140. The Pound’s recovery demonstrates impressive resilience despite the broader market turmoil that saw US equities suffer their worst day since October.
The pair benefited from continued Dollar weakness, with the DXY challenging the 99.00 zone at fresh monthly lows. This Dollar decline persisted despite an uptick in Treasury yields and the significant drop in December Fed rate cut odds from 62.9% to 51%.
The shift in expectations follows growing recognition of the Fed’s post-shutdown challenges. White House press secretary Karoline Leavitt’s announcement that key October economic reports may never be released creates unprecedented uncertainty about the central bank’s ability to make truly data-dependent decisions.
Despite this complex backdrop, Cable managed to briefly reclaim the 1.3200 level, suggesting underlying Sterling strength. With the UK economic calendar essentially clear until the November 19 inflation report, GBP/USD will be primarily driven by Dollar dynamics and broader risk sentiment in the coming days.
Thursday’s equity market rout saw the Dow plunge 797 points, the S&P 500 shed 1.66%, and the Nasdaq tumble 2.29% as technology valuations came under renewed pressure. Disney’s 8% decline on mixed results added to the negative sentiment. However, some strategists view the selloff as a “healthy consolidation” rather than the start of a deeper correction.
Technical Outlook (4H)
- Current Price: 1.3144
- Stochastic attempting to cross lower from overbought—suggests profit-taking
- Price testing 20-period moving average from above—critical support level
- Technical structure indicates consolidation after recent advance
Key Levels
| Resistance | Support |
|---|---|
| 1.3189 | 1.3079 |
| 1.3251 | 1.3026 |
Fremora Takeaway GBP/USD’s pullback from 1.3200+ to test the 20-period moving average suggests the pair is entering a consolidation phase after reversing earlier weekly losses. The technical picture indicates profit-taking has emerged, though holding above the moving average would maintain the constructive outlook. With the UK calendar clear until the November 19 inflation report, Cable will be driven primarily by Dollar dynamics and global risk sentiment. Today’s Fed speakers could provide fresh impetus—dovish signals would support further gains toward 1.3189, while hawkish pushback might trigger a deeper pullback toward 1.3079 support. The warning about “market chop” in coming weeks as delayed data resumes underscores the potential for whipsaw price action.
Disclaimer The analysis provided is purely for informational purposes and does not constitute investment advice. Trading and investing involve substantial risk, and past performance is not indicative of future results. Fremora analysts strive for accuracy but make no representations regarding the completeness or accuracy of the information. Readers should conduct their own research and consult with a licensed financial advisor before making investment decisions.
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