EUR - Euro rises after France suspends pension, Euro rises

The dollar fell against major currencies on Tuesday as US-China trade tensions escalated again, while the euro strengthened after the French government proposed suspending a landmark pension reform. The US and China charging additional port fees on Tuesday began to shipping companies transporting everything from holiday toys to crude oil. China's Ministry of Transport announced on Tuesday that it is investigating whether the security and development interests of China's shipping, shipbuilding, and related supply chains have been affected or potentially affected by the US Section 301 investigation, and whether relevant companies, organizations, or individuals have implemented, assisted, or supported discriminatory US restrictive measures against China in the shipping, shipbuilding, and related supply chains. These tit-for-tat measures undermined US President Trump's seemingly conciliatory tone over the weekend, which had fueled some optimism earlier this week. Separately, Federal Reserve Chairman Jerome Powell said on Tuesday that the US labor market remained mired in a sluggish state of "low hiring and low layoffs" throughout September, although the economy may be on a "slightly more robust track than expected."

French Prime Minister Jean-Yves Le Corny proposed suspending the landmark 2023 pension reform until after the 2027 presidential election, a concession to left-wing lawmakers who demanded the move as a condition of their political survival. Le Corny, who faces at least two no-confidence votes later this week, announced the decision in parliament as a last-ditch effort to pass a slimmed-down 2026 budget. Following the announcement, the euro extended its gains against the dollar, stabilizing just above 1.16 in late trading.

As for the euro against the dollar, the RSI and Stochastics indicators remain lower, having tentatively broken below the rising trend line formed by the recent rally over the past month. The 10-day moving average has also broken below the 25-day moving average, suggesting continued downward pressure on the euro against the dollar. Key support lies between 1.15 and 1.14, followed by 1.1370 and the 200-day moving average at 1.1220. Upward resistance is seen at 1.1650 and 1.18, with higher resistance expected at 1.1850 and 1.1920.

Estimated Range:
Resistance: 1.1650 - 1.1800 - 1.1850 - 1.1920
Support: 1.1500 - 1.1400* - 1.1370 - 1.1220

News summary
14/10
Germany's September CPI rose 2.4% year-on-year.
Germany's September CPI rose 0.2% month-on-month.
Germany's September HICP rose 2.4% year-on-year.
Germany's September HICP rose 0.2% month-on-month.
Germany's October ZEW Economic Sentiment Index was positive at 39.3.

ECB Board Member Villeroy de Galhau: The ECB's next move is more likely to be a rate cut than a hike.
ECB President Christine Lagarde: Despite France's budget crisis, bond markets are not in turmoil.

Focus:
Wednesday
Germany's September wholesale prices (2:00 PM)
Eurozone August industrial production (5:00 PM)

Thursday
Eurozone August Trade Balance (5:00 PM)

Friday
Eurozone September High Impact Investing Plan (HICP) (5:00 PM)

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