EUR/USD Analysis Summary Today
Overall Trend: Bearish.
Support Levels for EUR/USD Today: 1.1400 – 1.1360 – 1.1290
Resistance Levels for EUR/USD Today: 1.1490 – 1.1550 – 1.1630
EUR/USD Trading Signals:
Buy scenario: From the support level of 1.1390 with a target of 1.1550 and a stop-loss at 1.1320
Sell scenario: From the resistance level of 1.1540 with a target of 1.1400 and a stop-loss at 1.1600
Technical Analysis of EUR/USD Today
The Euro to US Dollar (EUR/USD) exchange rate faced strong selling pressure during last week's trading. This came after the US Federal Reserve reinforced market expectations that tight monetary policy will persist for longer than anticipated, pushing the currency pair to its lowest level in nearly 11 weeks near the 1.1418 level during Tuesday's trading session.
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Although the Euro managed to trim some of its losses by the end of the week, the pair's direction in the coming period will remain captive to the balance between US inflation concerns and the monetary policy paths of both the Federal Reserve and the European Central Bank (ECB).
Technically, the overall trend for the EUR/USD pair remains tilted toward the negative (bearish) side as long as trading stabilizes below the main resistance zone of 1.1550 – 1.1600. Breaking the 1.1450 level reinforces the chances of targeting the 1.1400 and then 1.1300 zones in the coming weeks. Its recent losses are pushing technical indicators closer to oversold lines, as is the case with the Relative Strength Index (RSI) and the MACD indicator.
Conversely, if buyers manage to regain control and break through the nearby resistance levels, this could pave the way for an upward rebound towards 1.1700 and then 1.1800 in the medium term.
In general, the performance of the EUR/USD pair during the current trading week will remain primarily linked to US inflation data and statements from Federal Reserve officials, along with any new indications regarding the European Central Bank's (ECB) policy direction. These factors could determine the future direction of one of the most traded currency pairs in global markets.
Federal Reserve Policies and Dollar Strength
Last week, the Federal Reserve kept US interest rates unchanged at 3.75%, a decision that aligned with market expectations. However, the surprise came in the updated economic projections, where half of the Federal Open Market Committee (FOMC) members indicated a potential need for further interest rate hikes by the end of 2026.
Federal Reserve Chairman Kevin Warsh's comments also supported the dollar, as he affirmed the US central bank's commitment to bringing inflation back to its 2% target. This reinforced investors' bets on continued monetary tightening in the coming months.
Concurrently, the likelihood of another US interest rate hike increased, which contributed to increased demand for the dollar and pushed the EUR/USD pair further down.
Will the Euro's Losses Continue?
Danske Bank believes that the downward pressure on the EUR/USD is not over yet, maintaining its forecast for the pair to drop to the 1.12 support level over the next twelve months—a level below the market consensus average. The bank believes that tightening global financial conditions will negatively impact the pace of economic growth, which has already been reflected in the performance of equity markets and cyclically linked currencies, playing in favor of the US Dollar as a more attractive safe haven.
The bank also maintains its expectation that the Federal Reserve will raise interest rates two more times next year, with an increasing likelihood of an earlier tightening cycle if US economic data continues to outperform expectations.
On the other hand, ING Bank adopts a more balanced view toward the pair's movement. While it acknowledges that the Dollar is currently benefiting from tight monetary policy expectations, it questions the Federal Reserve's ability to execute further interest rate increases. The bank believes that inflationary pressures could ease significantly next year, and the strength of the US labor market still requires further confirmation. Therefore, it expects the EUR/USD pair to remain under pressure over the next two months near the 1.14 – 1.15 levels before beginning to recover gradually.
According to the bank's estimates, the pair could rise to 1.18 by the end of the year if US economic data comes in weaker than expected and fails to justify further monetary tightening.
Trading Advice:
It is preferable for traders to monitor stronger gains that could serve as selling targets. Meawhile, maintaining strict risk management in light of the ongoing market uncertainty.
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