EUR/USD and GBP/USD Face Potential Volatility Amid US Shutdown
Last week, both EURUSD and GBPUSD were weighed down by the ongoing U.S. government shutdown and uncertainty over the U.S. – China trade tensions. Key economic releases, including CPI data from the U.S. and U.K., as well as central bank speeches, are expected to drive price action this week. Technically, both pairs remain neutral, with traders waiting for fresh opportunities amid mixed market sentiment.
EURUSD Weakens on U.S. Political Uncertainty and Trade Tensions
EURUSD ended last week’s trading session lower as the U.S. government shutdown entered its fourth consecutive week, amid growing uncertainty surrounding the latest tariffs imposed on Chinese goods by President Trump. The ongoing government closure has delayed key economic data releases, adding to market uncertainty regarding the performance of the world’s largest economy.
On the Euro side, newly appointed French Prime Minister Lecornu secured a confidence vote in parliament, providing some support for the single currently against the U.S. Dollar.
This Week’s Market Focus: U.S. CPI, Trade Tensions, and Central Bank Speeches
This week, traders and investors will mainly focus on any developments regarding a potential U.S. government reopening plan and progress in the ongoing trade tensions between the U.S. and China. The U.S. CPI report is expected to be one of the biggest catalysts behind any price action for this week. Scheduled speeches from Federal Reserve and ECB officials may offer further insight into the future direction of monetary policy.
On the economic calendar, Friday’s data will include the Eurozone Manufacturing PMI, projected lower at 49.5, the U.S. CPI expected to remain steady at 0.3%, and the U.S. Service PMI holding at 54.2.
EURUSD Technical Outlook
Technically, the pair remains neutral after last week’s close above 38.2% at 1.1651. Buyers have taken profit on their long positions at 1.1700 and are currently waiting for new entry opportunities. Current position sentiment stands at 50% BUY and 50% SELL.
EURUSD chart, October 26, 2025. Source: TenTrade.com
U.S. Shutdown and BOE Risks Weigh on GBP/USD
GBPUSD closed last week’s trading session lower as the U.S. government shutdown entered its fourth consecutive week, reinforced by uncertainty over the latest tariffs on Chinese goods imposed by president Trump. The ongoing shutdown has delayed key economic data releases, heightening market uncertainty about the performance of the world’s largest economy.
On the GBP side, disappointing employment figures may increase pressure on the Bank of England to consider further rate cuts in the future, adding additional downside risk to the pair.
GBP/USD Weekly Outlook
This week, traders and investors will focus on the ongoing U.S. – China trade tensions, particularly President Trump’s tariffs. CPI releases from both the U.S. and the U.K. are expected to be key factors for market movements. A potential U.S. government reopening could support the U.S. Dollar, putting additional downward pressure on the pair.
On the economic calendar this week, key data releases include the U.K. CPI on Wednesday, expected to be higher at 3.7%. On Friday, U.K. retail sales are expected to come in lower at -0.2%, U.K. manufacturing PMI is expected to remain unchanged at 46.2, while U.S. CPI is thought to remain steady at 0.3% and US Services PMI at 54.2.
Technically, the pair remains neutral after last week’s close above 38.2% at 1.3422. Long positions remain open at 1.3369, targeting profits above 1.3500. Market sentiment stands at 75% BUY and 25% SELL.
Key Takeaways
- U.S. government shutdown continues, increasing uncertainty for both EUR/USD and GBP/USD.
- Trade tensions between the U.S. and China remain a major market driver.
- CPI releases and central bank speeches this week could trigger significant price action.
- EUR/USD is technically neutral after last week’s close above 38.2% Fibonacci, with 50/50 position sentiment.
- GBP/USD is also neutral, facing downside pressure from disappointing UK employment data, with sentiment tilted 75% long / 25% short.
