EUR/USD Week Ahead: Focus on US NFP, ISM PMIs, and Eurozone CPI

The upcoming week brings a series of high-impact macroeconomic indicators and political developments that are expected to drive significant volatility in EUR/USD. Market attention will center on the US labor market report, ISM business surveys, Eurozone inflation figures, and the US Congressional elections.

US Labor Market and Non-Farm Payrolls

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The US economic agenda begins on Tuesday with JOLTS job openings, projected to reach 7.10 million compared to 7.079 million in August. Wednesday's ADP private employment report is expected to show a slowing pace of hiring at 65,000, down from September's 90,000 gain. While ADP figures often diverge from official data due to methodology differences, a subdued reading could heighten market sensitivity ahead of the primary employment report.

The week's main macro event occurs on Friday, November 6, with the release of October's Non-Farm Payrolls (NFP). Consensus forecasts expect 65,000 job additions, a steady unemployment rate at 4.2%, and average hourly earnings growth accelerating to 0.3% month-on-month. Following September's weak 29,000 job gain and downward revisions to prior months, USD bulls likely require a payroll figure exceeding 100,000 along with solid wage growth to reinforce expectations for Federal Reserve rate hikes.

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ISM PMIs and Economic Momentum

Prior to the employment report, the Institute for Supply Management (ISM) will publish its monthly sentiment surveys. The manufacturing PMI on Monday is forecast to tick up to 54.7 from 54.5, while Wednesday's services PMI is expected to edge down to 54.8 from 54.9. Both metrics remain in expansion territory above 50, though traders will closely examine sub-components—including prices paid and employment—for signs of underlying price pressures or softening demand.

Eurozone Inflation Outlook

On Wednesday, November 4, Eurozone preliminary CPI for October will be released, with headline inflation projected to rise to 3.9% from 3.8% in September. Core CPI, which excludes food and energy, is forecast to hold steady at 2.5%. While recent lower-than-expected German inflation (falling to 2.8% headline and 2.1% core) points to potential downside risks, persistent price growth in France and Italy could offset the decline, leaving European Central Bank policy expectations sensitive to core CPI performance.

US Midterm Elections and Technical Outlook

Political developments will also impact market momentum as the US holds midterm elections on Tuesday, November 3. A Republican sweep of both chambers would likely support the US dollar on expectations of fiscal stimulus and higher Treasury yields, though concerns over a rising fiscal deficit could temper gains. Conversely, a split Congress with Democrats taking a majority in at least one chamber could weigh on the greenback by limiting legislative action.

From a technical perspective, a combination of strong US data and solid payroll numbers could enable EUR/USD sellers to retake control and test immediate technical support near 1.1130, which aligns with the lower Bollinger Band on the daily timeframe.

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