The EUR/USD remains near one-month lows at around 1.1660, pressured by political instability in France and the US government shutdown, which has also limited economic data releases.

The EUR/GBP dropped sharply to a two-week low of 0.8674 amid European political and economic concerns, with France's political turmoil notably impacting the euro.

Investors are awaiting upcoming Sentix Investor Confidence data and comments from ECB officials to gauge future monetary policy directions.

Market expectations show a 46 basis points easing by the end of 2024 and 112 basis points by 2026, with an October rate cut largely priced in, while December's move depends on upcoming economic data.

The ECB recently kept interest rates unchanged, signaling an end to rate cuts, as President Lagarde indicated that disinflationary pressures are over and growth risks are balanced.

ECB Chief Economist Philip Lane signaled a cautious stance, hinting at a slight rate reduction if downside risks increase, which dampens Euro sentiment.

Upcoming economic catalysts include US Jobless Claims, Fed Chair Powell’s speech, and the University of Michigan Consumer Sentiment report, which could influence USD movements.

Technical analysis suggests EUR/USD is near the lower bound of its daily range, with potential support around 1.1650 and a possible move toward 1.1780, though caution is advised for sellers.

Market expectations of Fed rate cuts—95% in October and 84% in December—alongside the ECB’s stable policy, are limiting USD strength and supporting the euro.

Market focus remains on comments from ECB President Christine Lagarde and the lack of high-impact economic data, contributing to bearish sentiment in EUR/USD.

French Prime Minister Sébastien Lecornu's resignation has heightened political instability, causing a Euro selloff and a drop in France’s CAC 40 Index, reflecting fears of a deepening crisis.

The US government shutdown persists, with warnings of layoffs and delays in key economic reports, which has restricted market confidence and stalled the USD rally.