09/10/25

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The EUR/USD currency pair continued its downward trajectory on Thursday, approaching the 1.1600 level during the European trading session. This persistent decline underscores a bearish technical outlook in the near term, with the pair having closed the first three days of the week in negative territory. The sustained strength of the US dollar contributed to the slide, as market participants largely remained indifferent to ongoing government shutdown concerns and the delay in key macroeconomic data releases.

In the absence of significant economic indicators, market sentiment remained cautious, supporting the US dollar’s posture. Traders are keenly awaiting remarks from Federal Reserve Chairman Jerome Powell, scheduled for later in the day. The tone of his comments could influence the dollar’s momentum, particularly if he emphasizes patience regarding future monetary policy adjustments amidst the uncertainties stemming from the government shutdown. Should Powell suggest a cautious approach, markets might reassess expectations for a near-term rate cut, potentially bolstering the USD further.

Market probabilities for the Federal Reserve’s December decision remain modest, with about a 22% chance of maintaining the current policy rate, according to the CME FedWatch Tool. This aligns with the current market sentiment, which has shifted slightly away from expectations of substantial easing in the near future.

Technically, the EUR/USD pair has broken below key support levels, including its first daily close below the 100-day Simple Moving Average (SMA) since February. The Relative Strength Index (RSI) on the four-hour chart indicates the pair is not yet oversold, leaving room for further declines. The immediate support levels are around 1.1580, followed by the 1.1500 round figure, which marks the 78.6% Fibonacci retracement of recent gains.

Looking upwards, resistance levels can be identified at 1.1630-1.1640, near the 100-day SMA and the 50% Fibonacci retracement, with more substantial resistance around 1.1700-1.1715, where the 38.2% retracement coincides with the 200-period SMA. The euro remains the second most traded currency globally, with the European Central Bank primarily responsible for setting monetary policy aimed at maintaining price stability. Future data releases, including inflation and trade balance figures within the eurozone, will continue to influence the euro’s direction against the US dollar.