Against the backdrop of a sparsely populated economic calendar, political and geopolitical developments in the United States, France, and China will take center stage for currency market traders.

The upcoming week lacks major scheduled events for the EUR/USD pair—though with an important caveat: this only holds true if the U.S. government shutdown continues. If Congress reaches an agreement and approves the budget for the new fiscal year, government agencies will resume full operations. In that case, key macroeconomic data will start flowing rapidly.

In particular, markets will receive the September Nonfarm Payrolls report and crucial inflation data from the U.S. (CPI and PPI indices). These releases are expected to generate significant volatility in EUR/USD, especially if the data points align (for example, showing signs of labor market cooling alongside stagnant or weakening inflation).

If the shutdown continues for an extended period, traders will be forced to rely on secondary news drivers. Moreover, the market will continue tracking statements from Donald Trump and Chinese officials amid the sudden escalation of the U.S.–China trade war.

Trump Tariffs and China's Response

At the start of the new trading week, EUR/USD will move in continuation of Friday's momentum, when the U.S. dollar weakened across the board. The move came in response to Trump's announcement that starting November 1, the U.S. will impose 100% tariffs on Chinese goods. According to Trump, these tariffs will be "above and beyond any existing duties currently paid by China." Additionally, the U.S. plans to implement export controls on all critical software starting next month.

It's important to note that the first escalatory move came from China, which announced tighter export controls on rare earth metals. Trump responded by drastically raising the stakes, with the 100% tariff effectively acting as a renewed embargo on Chinese imports.

The U.S. president made this announcement just hours before markets closed on Friday. Despite the initial volatile response, likely, traders have not yet fully priced this development in. Moreover, China quickly issued a forceful response, accusing Washington of double standards and promising to take "appropriate measures to protect its interests."

This implies that Beijing is not backing down—at least for now—placing the two superpowers on the brink of a renewed phase in their trade confrontation.

Geopolitical Brinkmanship, But with a Delay

However, despite the aggressive rhetoric, both sides have left a time buffer: the U.S. tariffs are scheduled to take effect on November 1, while China plans to implement its new restrictions starting December 1. This suggests that both economies are preparing for another round of negotiations, but are first establishing hardline positions. Whether and when talks may actually resume remains unclear, and EUR/USD traders are unlikely to make long-term assumptions. For now, market participants will focus on immediate headlines, which are not in favor of the U.S. dollar.

French Political Dynamics Add Complexity

The euro gained moderate support on Friday following Emmanuel Macron's reappointment of Sebastien Lecornu as Prime Minister of France. However, political stability in France remains fragile due to the absence of a pro-presidential majority in parliament. After his reappointment, Lecornu stated that he may once again resign if "the working conditions are not adequate," referring specifically to the need for legislative support—especially for budget proposals.

If this support fails to materialize, the French president could dissolve the National Assembly and call early elections. Such a move would likely apply downward pressure on the euro, as the newly elected parliament would likely have a pronounced right-wing tilt.

Markets Eye Secondary Data and Political Risk

Due to the light economic calendar, political and geopolitical developments (such as the shutdown, France, and the U.S.–China trade war) will be the primary focus for EUR/USD traders.

Upcoming Economic Releases That May Move EUR/USD

• On Tuesday, the ZEW indices will be released. Positive results are expected, with the German Economic Sentiment Index projected to rise to 41.7 (after increasing to 37.3 in September). The broader Eurozone ZEW index is also set to increase to 30.2 (from 26.1 in the previous month).
• On Wednesday, China will publish key inflation data. If the CPI reading surprises to the upside (exceeding the forecast of -0.2%), it could have a secondary impact on EUR/USD.
• During Wednesday's U.S. session, the Empire Manufacturing Index will be released. After plunging to -8.7 in September, a slight rebound to +0.2 is expected.

If the government shutdown ends before Wednesday—which remains unlikely—then major U.S. inflation metrics (CPI) may also be released that day. However, political deadlock between Republicans and Democrats continues to make this scenario improbable.

• On Thursday, the Philadelphia Fed Manufacturing Index will be published. After surging to 23.2 in September, it is expected to decline to 9.1 this month. For bullish dollar sentiment to recover, this figure must not fall back into negative territory.
• If the shutdown ends, the Producer Price Index may also be released on Thursday.
• On Friday, the final inflation data for the Eurozone (September) is scheduled for publication. This data is expected to match the previously released preliminary estimate and is the only significant figure from the Eurozone for the day unless the U.S. government resumes operations.

If the shutdown ends, the long-awaited Nonfarm Payrolls data from September will also be released on Friday, further amplifying volatility.

Technically: EUR/USD Key Resistance and Bullish Confirmation

Long positions on EUR/USD should be considered only after a confirmed breakout above the resistance level of 1.1630 (Kijun-sen line on H4 chart). The first upside target in this case would be 1.1680 (the upper Bollinger Bands boundary on H4). A successful move beyond this area would open the path toward the 1.1700 zone.