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• Data on Monday painted a bleak picture of the Eurozone economy.

• Market participants raised the chances of an ECB cut in October to 77%.

• The US composite PMI held steady at 54.4 in September.

The EUR/USD price analysis shows a transition from a bullish to a ranging market after PMI data in the Eurozone and the US. Business activity in the Eurozone deteriorated in September, sinking the euro. Meanwhile, it held steady in the US.

Data on Monday painted a bleak picture of the Eurozone economy. S&P Global released a set of PMI figures showing the composite number at 48.9 in September, down sharply from the previous month’s 51.0. 

A decline in business activity is a sign that the economy is struggling amid high interest rates. Consequently, market participants raised the chances of an ECB cut in October to 77%. The European Central Bank started its rate-cutting cycle before the Fed. However, it paused after the first cut as it became clear inflation remained stubborn. However, economic weakness puts more pressure on the central bank to cut at the next meeting.

Meanwhile, in the US, the composite PMI held steady at 54.4 in September after a reading of 54.6 in August. The US economy has remained resilient despite high rates. Last week, data on retail sales revealed an unexpected jump, indicating resilient consumer spending. Therefore, the Fed might achieve a soft landing, with inflation easing without destroying growth. 

The next major US reports will include GDP and the core PCE. These figures will shape the outlook for future rate cuts. Currently, market participants are betting on another massive rate cut in November.

EUR/USD key events today
 

• US CB consumer confidence

EUR/USD technical price analysis: Consolidation after RSI divergence
 

EUR/USD 4-hour chart

On the technical side, the EUR/USD price is chopping through the 30-SMA amid wild swings. At the same time, the price is respecting the 1.1075 support and the 1.1175 resistance level. Meanwhile, the RSI is also chopping through the pivotal 50 mark, a sign that the price is ranging. 

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