EUR/USD: There are still many clouds ahead of our EUR/USD forecast – Commerzbank

💡 DMK Insight

The looming US government shutdown is more than just a political issue; it’s a potential market disruptor. Traders should be aware that uncertainty around fiscal policy can lead to increased volatility across various asset classes, particularly in forex and equities. If the shutdown extends, we could see a flight to safety, pushing investors towards gold and the US dollar, while riskier assets may take a hit. Look at how the markets reacted during previous shutdowns—typically, we see a dip in consumer confidence and spending, which can ripple through to corporate earnings. This time, with inflation still a concern, the implications could be even more pronounced. Keep an eye on key economic indicators like jobless claims and consumer sentiment reports, as these will provide insight into how the market is digesting the shutdown news. For traders, monitoring the S&P 500 and USD pairs will be crucial. If the S&P breaks below its recent support levels, it could signal a broader risk-off sentiment. Conversely, if the dollar strengthens, it might be time to reassess positions in commodities and emerging markets.