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EUR/USD Forecast: Slips to 1-Month Lows Amid French Politics

By Published On: October 6, 20252.5 min readViews: 310 Comments on EUR/USD Forecast: Slips to 1-Month Lows Amid French Politics

  • EUR/USD forecast remains restrained around 1.1660, with political chaos in France and the US government pressuring market sentiment. 
  • The downside risk is restricted by expectations of Fed rate cuts, and the euro finds backing from the ECB’s stable stance.
  • Traders are focused on potential technical levels and economic data, which could influence EUR/USD’s upcoming move. 

The EUR/USD forecast indicates the pair continues to hold steady near one-month lows since renewed political instability in France and the ongoing US government shutdown constrain the market. The euro dropped below 1.1700 just as the French Prime Minister, Sebastian Lecornu, resigned. This move exacerbated concerns about worsening Eurozone instability. 

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On the other hand, the continuing US fiscal impasse, in its second week, has impeded government operations and stalled major data releases. Meanwhile, President Trump’s threat of mass layoffs has further shaken the markets. Keeping these pressures in view, the downside for EUR/USD looks limited. According to the CME FedWatch tool, there is a 95% probability of an October cut and 84% for December. Additionally, this dovish sentiment could cap further US dollar strength. 

In the European part, the ECB’s cautious stance suggests limited but stable backing for the bloc’s currency. Policymaker Martin Kazaks emphasized that current interest rates are very reasonable, indicating policy stability despite inconsistent regional growth. 

Eurozone retail sales increased 1% year-on-year in August, in line with forecasts but declining from July’s 2.1%, highlighting a moderate consumer recovery. Investors now anticipate Sentix Investor Confidence data and comments from ECB President Christine Lagarde, Vice President Luis de Guindos, and board member Philip Lane for additional policy signals. 

By and large, while US fiscal deadlock and France’s political unrest continue to dampen sentiment, expectations of Fed rate cuts and stable ECB policy could offer the euro some strength. 

EUR/USD Key Events Today

The economic calendar is light today with no major data releases, while French politics and US funding talks have taken center stage. 

EUR/USD Technical Forecast: Bearish Pressure Below 1.1720

EUR/USD Forecast: Slips to 1-Month Lows Amid French Politics
EUR/USD daily chart

The EUR/USD daily chart reveals the currency pair retaining a sideways-to-bearish bias. The price has declined beneath the 20-day moving average (green line) and is holding right above the 100-day SMA (orange line) near 1.1620, indicating short-term weakness. A drop below this level could expose the next downside around 1.1195 (200-day SMA). 

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The RSI has dropped near 45, highlighting slowing momentum and signaling that bearish pressure may persevere unless buyers reclaim control above 1.1720. Overall, EUR/USD looks range-bound with a mild breach tilt, expecting a breakout for precise directional movement. 

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