9 September 2025,06:26
Daily Market Analysis
9 September 2025, 06:26
Key Takeaways:
*Weak U.S. jobs data cement September Fed cut expectations.
*ECB seen holding rates at 2.00% through 2025, first cut in 2026.
*France faces political turmoil after Bayrou ouster, raising risk.
Market Summary:
The Euro is trading with a cautiously firm bias near 1.1750, lifted by broad U.S. Dollar weakness but still hemmed in by Eurozone political and economic fragility. Last week’s shock U.S. jobs report only 22,000 payrolls added and unemployment rising to 4.3% sent the Dollar Index tumbling toward 97.50, all but cementing a September Fed rate cut. This external backdrop has been the Euro’s main source of strength.
Policy divergence also underpins the currency. The European Central Bank has struck a more hawkish tone compared with the Fed, with officials like François Villeroy de Galhau signaling confidence in the inflation outlook. Markets expect the ECB to hold its deposit rate at 2.00% through 2025, with the first cut not priced until 2026, reinforcing the contrast with a Fed set to begin an easing cycle.
However, internal headwinds are intensifying. France has been plunged into political turmoil after Prime Minister François Bayrou was ousted in a confidence vote tied to a €44 billion austerity plan. President Emmanuel Macron now faces tough choices: appoint a technocrat, forge a fragile coalition, or risk snap elections that could embolden eurosceptic forces. At the same time, Eurozone data has softened that Sentix investor confidence fell to a five-month low of -9.2, while Germany’s trade performance weakened despite firmer industrial production, underscoring lingering growth risks.
In the near term, the Euro’s outlook will hinge on Thursday’s ECB meeting and whether political uncertainty in Paris deepens or stabilizes. A sustained break above 1.1750–1.1800 will require hawkish reassurance from President Lagarde alongside greater political clarity in France. Without both, the single currency is likely to remain capped, caught between external tailwinds from U.S. Dollar weakness and internal fragility at home.
The euro has extended its advance against the dollar, breaking firmly above the 1.1725 resistance zone and pushing toward 1.1780. The move reflects a decisive shift in near-term sentiment, with the pair benefiting from broad-based dollar softness and steady eurozone resilience. A sustained hold above 1.1725 would confirm the breakout, paving the way toward the 1.1880 barrier, while downside risks remain contained by initial support at 1.1725 and deeper cushions at 1.1585.
Momentum indicators are signaling strong but stretched conditions. The RSI is hovering around 71, entering overbought territory and suggesting the rally may be at risk of near-term consolidation. Meanwhile, the MACD has flipped positive with expanding histogram bars, highlighting strong bullish momentum, though the elevated levels warn of potential fatigue if buying pressure eases.
Overall, EUR/USD maintains a bullish bias above 1.1725, with scope to extend gains toward 1.1880 if momentum persists. However, failure to defend 1.1725 would invite a corrective pullback, with 1.1695 and 1.1585 acting as key downside levels where dip-buying interest may reemerge.
Resistance levels: 1.1800, 1.1880
Support levels: 1.1725, 1.1585
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