Fundamental Market Analysis for October 2, 2025 EURUSDThe euro is holding in the 1.17000–1.18000 area amid a weaker U.S. dollar due to the government shutdown and a deterioration in private employment estimates. The probability of a Fed rate cut at the October meeting remains high, and the pause in the release of some U.S. macro data increases uncertainty and reduces the dollar’s appeal as a safe-haven asset. Against this backdrop, demand shifts in favor of currencies with more resilient domestic demand and lower fiscal risks.
On the European side, the focus is on the flash estimate of HICP inflation. An acceleration in services, alongside moderate dynamics in the energy component, supports expectations that the ECB will pause to assess the price trajectory rather than rushing into further easing. This narrows the rate differential with the U.S. in favor of the euro.
An additional driver of the pair’s strengthening is the decline in U.S. Treasury yields and rising risk appetite in Asia and Europe. Taken together, these factors form a fundamental case for buying EURUSD, provided risk is controlled.
Trading recommendation: BUY 1.17500, SL 1.17250, TP 1.18250
