The euro’s advance has lost steam after stalling just below 1.1780, with dollar recovery leaving bulls defending key near-term support. While weak U.S. data bolstered easing bets, the dollar clawed back ground late in the session as cross-market flows (CNH rebound, softer gold) turned in its favor.

Macro Backdrop

• Fed Expectations: The ADP miss aligns with dovish Fed guidance, but traders remain cautious, watching Challenger layoffs Thursday as one of the few scheduled releases not blocked by the shutdown.
• Labor Market Narrative: Revisions to August’s ADP also highlighted fragility, supporting long-term EUR/USD upside bias.
• Risk Sentiment: Broader FX vols remain subdued, but skews favor USD demand in the short term, limiting euro traction.

Technical Picture

• Trend Context: EUR/USD is consolidating within the 1.1606–1.1919 range, with recent lower highs indicating cooling momentum.
• Support Structure:
  • 1.1715–1.1716 (NY lows).
  • 1.1670–1.1660 (medium-term base).
  • 1.1606 (major pivot from September low).
• Resistance Structure:
  • 1.1780 (initial cap).
  • 1.1836 (Bollinger resistance).
  • 1.1919 (Sept peak).
• Momentum Signals: RSI divergence and MACD flattening highlight fading bullish pressure, even as longer-term structure remains intact.

Strategic View

EUR/USD faces a tactical tug-of-war: longer-term fundamentals argue for higher levels if U.S. labor softening persists, but short-term technicals caution against aggressive bullish positioning. A sustained close above 1.1780 is needed to reassert control. Failure to defend 1.1715 risks a slide toward 1.1670 and potentially 1.1606.