Euro and Pound Under Pressure as Markets Focus on Upcoming Data

The euro has resumed its decline amid political uncertainty in France, while the pound remains under pressure, following the broader weakness in European currencies. On Monday, the euro fell to its lowest level in more than a week after the surprise resignation of French Prime Minister Sébastien Lecornu, which deepened the country’s political crisis and fuelled bearish sentiment in the options market. The risk reversal indicator — a closely watched gauge of market sentiment — has turned negative, suggesting traders are bracing for further losses. With US trading subdued by the ongoing government shutdown, investor focus has shifted to European developments. In the coming sessions, attention will centre on macroeconomic releases from the eurozone and the United Kingdom, which could set the short-term direction for EUR/USD and GBP/USD.

EUR/USD

After testing and sharply rebounding from 1.1780, EUR/USD buyers lost upward momentum, allowing the price to settle below 1.1700. Yesterday, the pair hit a new September low at 1.1600 but recovered above that level following the release of the FOMC minutes. A firm move below yesterday’s low could pave the way for further declines towards 1.1530–1.1570, while a sustained rise above 1.1700 may revive bullish momentum and lead to a retest of recent highs near 1.1760–1.1780.

Key events that could influence EUR/USD pricing in the coming sessions:
→ 10:00 (GMT+3): Speech by Bundesbank’s Burkhard Balz
→ 13:00 (GMT+3): Eurogroup meeting
→ 14:30 (GMT+3): Publication of the ECB monetary policy meeting account

GBP/USD

Pound buyers failed to hold above 1.3500, prompting a renewed decline in GBP/USD and a test of key support in the 1.3370–1.3400 range. Technical analysis points to potential downside towards 1.3330. The bearish scenario would be invalidated by a confident move above 1.3500.

Key events that could affect GBP/USD in the near term:
→ 11:30 (GMT+3): Speech by Bank of England Monetary Policy Committee member Catherine Mann
→ 15:30 (GMT+3): Speech by US Federal Reserve Chair Jerome Powell
→ 15:30 (GMT+3): US initial jobless claims data

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