Euro Heads for 2.4% Monthly Loss Against Resurgent Dollar

Traders' Opinions

Summary:

EUR/USD is testing its 2026 low near 1.1324 as high US yields and Fed tightening expectations strengthen the Dollar. A breakdown could extend the decline toward 1.1250.

SELL EURUSD

EXP

TRADING

1.13500

Entry Price

1.12300

1.14200

1.13301 -0.00402 -0.35%

0.0

Pips

Flat

1.12300

Exit Price

1.13500

Entry Price

1.14200

The Euro extended its decline against the US Dollar on Tuesday, leaving EUR/USD within touching distance of its lowest level of the year as investors continued to favour the Greenback amid elevated US Treasury yields and expectations that the Federal Reserve is not finished raising interest rates.

EUR/USD fell to around 1.1338, sitting just above the 1.1324 year-to-date low. The pair is also heading toward a 2.4% decline for September, reflecting the widening pressure on the common currency as the Dollar benefits from stronger US fundamentals.

European data offered little reason for traders to reverse that trend. Eurozone Consumer Confidence deteriorated to -16.5 in September from -15.5, while Economic Sentiment slipped to 97.9 from 98.4. There were some brighter spots, with Industrial Confidence improving to -3.8 from -5.0 and Services Sentiment rising to 6.1 from 5.6, but the improvement was insufficient to generate meaningful demand for the Euro.

ECB policymaker Peter Kazimir also described September's rate increase as unavoidable, while calling for greater flexibility going forward and identifying January as a potential point for reassessing the central bank's policy stance. That message offers little immediate support to a currency facing an increasingly powerful Dollar.

The US side of the equation remains considerably stronger. Treasury yields are elevated, recent US economic data have remained resilient, and expectations continue to build that the Fed could tighten policy at least once more before year-end.

OCBC strategists highlighted the continued decline in US jobless claims as evidence of a firm labour market, increasing the possibility that upcoming payroll figures could surprise to the upside. A stronger employment report would strengthen the argument for further Fed tightening, potentially keeping Treasury yields elevated and extending Dollar demand.

OCBC expects a moderate Dollar rally into year-end, although the bank considers market pricing for almost four additional Fed hikes over the coming year aggressive unless demand-driven inflation becomes a dominant source of price pressure again.

For EUR/USD, the immediate picture therefore remains tilted lower. With the pair already testing its YTD trough, a sustained break beneath 1.1324 could open another leg of Euro weakness. Any recovery will likely require either a meaningful cooling in US data or a repricing of the increasingly hawkish Fed outlook.

Technical Analysis

Selling pressure continues to dictate EUR/USD price action on the hourly chart, with the pair steadily carving out lower peaks and deeper troughs. The decline has now carried price beneath the 1.1355–1.1360 floor, adding another bearish break to a structure that has been deteriorating throughout the second half of September.

Price is hovering near 1.1350 after briefly probing below 1.1340. The rebound from that low has so far lacked conviction and looks more like a short-term reaction following the latest selloff than the beginning of a broader recovery. Of particular interest is the 1.1355–1.1360 region: having previously provided support, this area could now become a ceiling if EUR/USD attempts another recovery.

Failure to regain that zone would leave the pair exposed to renewed weakness toward 1.1320, followed by the psychological 1.1300 handle. Once 1.1300 gives way, there is relatively little visible support on the chart before the 1.1250–1.1230 region, making that area the primary downside objective.

The bearish argument would begin to lose momentum if EUR/USD climbs back above 1.1360 and holds there. Such a move could allow a deeper recovery toward the 1.1400–1.1410 supply zone, where another battle between buyers and sellers would likely develop. Further resistance sits around 1.1450–1.1460, although price would need a considerably stronger reversal before that area becomes relevant.

For now, the chart continues to favour selling into temporary rebounds. The repeated inability to sustain recoveries, combined with the loss of successive support zones, suggests the market is still searching for a lower equilibrium. A failed retest of 1.1355–1.1360 would strengthen the case for another push toward 1.1300 and eventually the projected 1.1230 region.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.1350

STOP LOSS: 1.1420

TAKE PROFIT: 1.1230

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Euro Heads for 2.4% Monthly Loss Against Resurgent Dollar

Technical Analysis

Risk Disclosure