The following article is a rewritten and expanded version based on “EUR/USD, USD/JPY: Shutdown Leaves Traders Hanging on Private Data for Direction,” originally authored by Pinchas Cohen, and published on Investing.com.
U.S. Government Shutdown Complicates Forex Market Assessments
The ongoing U.S. government shutdown has begun affecting a wide range of economic data releases, forcing foreign exchange traders to depend on non-traditional sources for critical insights. This reduced visibility into official economics and policy has made already volatile currency pairs such as EUR/USD and USD/JPY more sensitive to alternative indicators and market sentiment. Investors have shifted focus toward privately released data, survey-driven reports, and global macroeconomic developments to decipher directional bias across currencies.
Key Effects of the U.S. Government Shutdown on Forex Trading
– The temporary halt of several U.S. government departments has delayed the release of vital economic data such as:
– Nonfarm Payrolls
– CPI and PPI inflation reports
– Retail sales figures
– Durable goods orders
– Trade balance statistics
– These data points are instrumental in shaping expectations around U.S. economic strength, Federal Reserve policy, and, by extension, the U.S. dollar’s trajectory.
– Traders now find themselves reliant on:
– Private sector reports (such as those from ADP, ISM, and Markit Economics)
– Public statements by Federal Reserve members
– Market-based indicators like Treasury yields and equity indices
– Geopolitical developments, particularly in Europe and Asia
EUR/USD: Market Cautiously Awaits Direction Amid Uncertainty
The EUR/USD currency pair has exhibited relatively muted activity in recent sessions, largely due to the lack of fundamental drivers from the U.S. side and mixed sentiment from Europe. Market participants are expressing restraint as they wait for clearer macroeconomic signals, potentially to be provided by private surveys or comments from European Central Bank (ECB) officials.
Technical Overview of EUR/USD:
– The pair has been oscillating within a narrow range, primarily between 1.0870 and 1.0980, lacking conviction in either direction.
– Support appears to be forming around the 1.0870 level, while minor resistance remains near 1.0930 to 1.0950.
– The MACD and RSI indicators suggest neutrality, with neither bullish nor bearish momentum taking over in the short term.
– The 50-day moving average is relatively flat, underlining the lack of trend confirmation.
Fundamental Factors Influencing EUR/USD:
– Limited U.S. data has kept the greenback range-bound, allowing the euro room to maneuver based on regional sentiment.
– European data has been mixed, with German factory orders showing some resilience but broader eurozone growth indicators pointing to fragility.
– ECB policymakers have maintained a cautious outlook, suggesting that rate hikes are unlikely in the near future unless inflation pressures rise more tenaciously.
– Concerns over lingering inflation and geopolitical risks in Eastern Europe continue to weigh on investor confidence across the eurozone.
Private data, such as the Markit Eurozone Composite PMI, has become increasingly crucial for EUR/USD traders. Recent data there has published slightly above expectations, offering some tentative support to the euro.
Until either the U.S. resolves its shutdown and resumes data dissemination or the ECB provides stronger policy guidance, forex traders are likely to trade EUR/USD within established technical ranges.
USD/JPY: Bond Yields and Risk Sentiment Drive Directionality
In contrast to EUR/USD’s sideways behavior, USD/JPY has experienced more pronounced movements, largely tied to shifts in U.S. Treasury yields and broader market risk appetite. With major U.S. data unavailable, the Japanese yen, traditionally seen as a safe haven, has responded dynamically to global sentiment developments and bond market fluctuations.
Technical Overview of USD/JPY:
– The pair has recently tested the 150.00 threshold, a psychological level often associated with verbal intervention risk from Japanese authorities.
– Support levels are
Explore this further here: USD/JPY trading.