EUR/USD Signal: Steady Amid France Political Crisis – 07 October 2025

Bullish view

-- Buy the EUR/USD pair and set a take-profit at 1.1850.
-- Add a stop-loss at 1.1600.
-- Timeline: 1-2 days.
Bearish view

-- Sell the EUR/USD pair and set a take-profit at 1.1600.
-- Add a stop-loss at 1.1850.
The EUR/USD exchange rate remained under pressure as investors reacted to the new developments in France and as they waited for the upcoming statements by top Federal Reserve officials. It was trading at 1.1710, a few points above Monday’s low of 1.1650.

France Political Crisis and FedSpeak

The EUR/USD exchange rate wavered as investors reacted to the new political crisis in France, where Sebastien Lecornu resigned as the country’s premier, a month after taking the job. This resignation made him the shortest-serving prime minister and the third one since last September.

In a statement, Emmanuel Macron gave him 48 hours to lead talks with political parties to find stability for the country. Therefore, there is a likelihood that the country will not pass the budget by the end of the year. It also raises the possibility that Macron will call for an election.

The developments in France are notable because it is the second-biggest economy in the bloc with a GDP of over $3.6 trillion. It has also become one of the slowest-growing country in the region.

The EUR/USD exchange rate also reacted to the developments in the United States, where the Trump administration is putting pressure on Democrats as the shuttle continues. Trump is considering mass layoffs in the country that will make the labor situation worse. A report released on Wednesday by ADP showed that the economy lost 36,000 jobs in September.

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The next key catalyst for the EUR/USD will be statements from top central bank officials like Neel Kashkari, Raphael Bostic, Stephen Moran, and Michele Bowman, who will react to the ongoing government shutdown and the labor market and what to expect in the next meeting.

Christine Lagarde, the head of the European Central Bank (ECB) will also talk, and possibly comment on the bank's policies, with most economists expecting it to maintain interest rates steady.

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EUR/USD Technical Analysis

The daily timeframe chart shows that the EUR/USD exchange rate remained under pressure on Tuesday morning. It was trading at 1.1700, a few points above this week's low of 1.1650.

The pair has remained above the lower side of the ascending channel and the bottom of trading range of the Murrey Math Lines. It has also moved above the Ichimoku cloud indicator.

Therefore, the pair will likely bounce back in the coming days as long as it remains above the lower side of the channel and the 50-day moving average. If this happens, it may retest the strong pivot reverse point at 1.1960.

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