The EUR/USD pair fell by 0.5% on Monday, snapping its recent bullish streak after weaker-than-expected economic data from the Eurozone. The disappointing Purchasing Managers Index (PMI) figures weighed heavily on the Euro, making it one of the worst trading days for the currency pair in the second half of the year. This comes amid broader uncertainty as markets digest mixed signals from the US economy and Federal Reserve officials.

The Eurozone’s latest PMI data highlighted ongoing economic struggles, with the manufacturing sector in particular showing signs of continued contraction. Meanwhile, the US PMI print for September showed a mixed performance. The S&P US Manufacturing PMI dropped to 47.0, its lowest reading since July 2023, reinforcing concerns about a gloomy outlook for US manufacturing. On the other hand, the S&P US Services PMI posted a better-than-expected 55.4, though it eased slightly from August’s 55.7.

Despite these mixed data points, sentiment in the market remained cautious. The Euro struggled to hold its ground as investors weighed the implications of the Fed’s surprise double rate cut last week. While the cut initially weakened the US Dollar, the Euro failed to capitalize on the move, with risk appetite souring on the single currency.

Looking ahead to Tuesday, the EUR/USD pair is expected to trade in a tight range, with little major economic data due from either side of the Atlantic. However, attention will be on Federal Reserve Governor Michelle Bowman, who is set to speak. Investors are keen to gauge any shifts in Fed policy after Chicago Fed President Austan Goolsbee signaled on Monday that further rate cuts might be necessary to maintain business lending conditions, citing tight liquidity and a cooling US labor market.

With the EUR/USD pair hovering around the 1.1100 handle, bullish momentum appears to be fading. The pair has repeatedly tested yearly highs, but remains unable to break above the critical 1.1200 level, indicating a potential exhaustion among bulls. Market participants remain cautious, with many waiting for clearer signals from both the Eurozone and US economic fronts.

As uncertainty lingers, the EUR/USD outlook remains clouded. The broader market will be watching closely for any indications that could provide direction, though for now, the pair remains range-bound, caught between a weakening Euro and mixed US data.