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• The EUR/USD currency pair held near the 1.1740 mark as the US government shutdown delayed key reports, including Nonfarm Payrolls.
• Fed officials diverged: Logan was hawkish on sticky services inflation, while Miran was dovish, stressing forward-looking policy.
• US ISM Services stalled at a neutral reading, while S&P Global data showed modest expansion in business activity.

The EUR/USD currency pair consolidated on Friday amid a quiet trading session due to the lack of a fresh catalyst, sponsored by a US government shutdown that may be poised to extend beyond this week. The pair was seen trading at around 1.1738, up approximately 0.28%, as of the time of writing.

Shared Currency Consolidated with Light Data and Split Rhetoric That Kept Traders Cautious

The US economic docket was light, featuring speeches by Federal Reserve officials, as the Nonfarm Payrolls report for September had been delayed. Vice-Chairman Philip Jefferson said that although it is not ideal not to get jobs data, they have enough information to do their job.

In the meantime, Dallas Fed Lorie Logan remained hawkish. She said that tariffs have been contributing to inflation, and that she is worried that non-housing services’ inflation has been elevated and has remained high.

Fed Governor Stephen Miran remained dovish, saying that access to data is important to set monetary policy, and he remains hopeful the Fed will have access to economic releases. Nevertheless, he acknowledged that Fed policy should be forward-looking.

Chicago Fed President Austan Goolsbee acknowledged that risks to the dual mandate are balanced, adding that although the markets had priced in rate cuts, the central bank should remain data dependent.

Data-wise, the docket released the Purchasing Managers Index (PMI) for September, provided by the Institute for Supply Management (ISM) and S&P Global. Prints were mixed, as the ISM revealed that the services survey clung to its expansion/contraction neutral level, while S&P Global showed that the economy expanded.

Market Movers: EUR/USD Pair Rose Despite the Fed's Hawkish Commentary

• Jefferson added that he expects the effects of tariffs on inflation, employment, and economic activity will show in the coming months. He added that the recent cut moved the Fed to a neutral stance. He expects the disinflation process to resume after this year and inflation to return to the 2% target in the coming years.
• Logan said that the price of goods will likely be tilted to the upside even after the tariff effect fades. She noted that the prolonged tariff effects may risk the rise of long-term inflation expectations. She recognized that monetary policy is likely just modestly restrictive.
• The ISM Services PMI fell short of expectations in September, slipping from 52 to 50 versus forecasts of 51.7, pointing to a slowing economy. Survey respondents signaled expectations for only “moderate or weak growth,” with the employment sub-index subdued as firms delayed hiring.
• By contrast, S&P Global’s Services PMI declined to 54.2, beating forecasts, but below August’s 54.5 reading, highlighting resilience in parts of the sector.
• Money markets priced in a 25-basis-point Fed cut at the Oct. 29 meeting, with odds standing at around 96%, according to Prime Market Terminal’s interest rate probability tool.

Technical Outlook: EUR/USD Pair Held Firm While Waiting For a Fresh Catalyst

The EUR/USD currency cross traded sideways above the 1.1700 figure for the fifth consecutive day on Friday. Although the pair is often bullish-biased, traders would have to clear the week’s high of 1.1778 before challenging the 1.1800 figure. A breach of the latter would expose the July 1 high of 1.1830 ahead of testing the yearly peak at the 1.1918 mark.

Conversely, a move below the 1.1700 level would target the 1.1650 area, followed by the 100-day SMA near 1.1605.

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