The EUR/USD pair has drifted after recent price action. Over the past two days, bears have been actively testing this price barrier (the low on Wednesday was 1.1470), but to no avail. Whenever the price approached 1.1480, the downward swing would lose momentum, and buyers of EUR/USD would take the lead. As a result, the pair moved away from the 14-figure zone and settled above the target of 1.1500.

A logical question arises: are we dealing with a correction or a trend reversal?

First and foremost, it should be noted that the dollar effectively ignored Wednesday's macroeconomic reports, despite their "green" outlook. Specifically, the ADP report reflected an increase of 42,000 jobs in the U.S. private sector. This figure not only crawled out of negative territory (with a decline of 29,000 jobs recorded in September) but also exceeded expectations (the forecast was +30,000). Another macroeconomic indicator—the ISM services activity index—was also published in the green zone. Instead of the anticipated growth to 50.8, it rose to 52.4, marking an eight-month high.

So why did market participants respond so coolly to these releases? Ultimately, these reports dampened bearish momentum, allowing buyers to regain the initiative. What are their shortcomings?

Indeed, there are significant "shortcomings." For instance, the headline ADP figure itself indicates that the U.S. labor market is not in the best shape. The 42,000 result is weak (for comparison, a year ago, in October 2024, the ADP report showed private-sector job growth of 240,000). Additionally, growth was concentrated in a few sectors and larger companies, while small and medium-sized firms are either laying off employees or not hiring new ones. This signals that economic activity is unevenly distributed. The wage component of the report also fell short: wage growth is not accelerating, alleviating pressure on the labor market.

The ISM services activity index has its flaws as well; although the headline figure has indeed reached an eight-month high at 52.4, the employment index remains below the 50-point mark, indicating contraction, sitting at 48.2 in October. Weak employment growth in the services sector (which is crucial to the labor market) increases the risk of a slowdown in economic growth.

We might also recall the ISM manufacturing index published in the U.S. on Monday. This key macroeconomic indicator fell to 48.7, below forecasts of 49.4. Over the previous two months, this indicator had shown an upward trend, but in October it fell into the red zone, reflecting a deteriorating situation in the manufacturing sector. The index has been in contraction territory for eight consecutive months since March of this year.

The ADP report and the ISM indices did not "rewrite" the fundamental picture concerning the EUR/USD pair. Traders still do not rule out the possibility that the Fed may cut the interest rate by 25 basis points at the December meeting. The likelihood of this scenario is currently estimated at 70% by CME FedWatch data.

In my opinion, the fate of the December meeting will be determined by the Non-Farm Payrolls (NFP), but, as is well known, due to the ongoing shutdown, NFP reports (as well as other official reports apart from CPI) are not being published.

Several analysts estimate that the 2025 shutdown, which has become the longest in U.S. history, could end by mid-November—implying that otherwise, both parties, Republicans and Democrats, would face electoral losses. Other experts disagree with such optimistic forecasts, claiming that in the current situation, electoral losses will primarily be borne by the Republicans alone. They base their position on the outcomes of local elections in New York, New Jersey, and Virginia, where members of the Democratic Party won convincingly. Such results could encourage Democratic senators to continue blocking White House initiatives, particularly on budget matters.

The intrigue remains, and thus the information vacuum persists. Meanwhile, EUR/USD sellers require additional informational support to break through the support level of 1.1480. The failed assault on this price barrier allowed buyers to reclaim initiative and organize a corrective bounce. A trend reversal can only be confirmed if the buyers of EUR/USD see favorable NFP reports.

Currently, the pair is testing an intermediate resistance level at 1.1530, which corresponds to the upper line of the Bollinger Bands indicator on the four-hour chart. If buyers break through this level, the next targets for upward movement will be levels of 1.1570 (the Tenkan-sen line on the daily chart) and 1.1590 (the lower boundary of the Kumo cloud on H4, also the middle line of the Bollinger Bands on D1).