EUR/USD Bears Stay in Control as US Yields Remain Elevated

Traders' Opinions

Summary:

EUR/USD remains near one-month lows around 1.1360–1.1400 as rising Oil prices pressure the Euro while high Treasury yields and Fed hike expectations support the Dollar.

SELL EURUSD

EXP

TRADING

1.13550

Entry Price

1.12300

1.14200

1.13663 -0.00228 -0.20%

0.0

Pips

Flat

1.12300

Exit Price

1.13550

Entry Price

1.14200

The Euro remains under pressure against the US Dollar on Monday, with EUR/USD struggling to move away from recent lows as renewed geopolitical uncertainty, rising Oil prices and elevated US Treasury yields continue to favor the Greenback.

EUR/USD is fluctuating between the 1.1360 area and the 1.1400 handle, keeping the pair close to its weakest level in roughly a month. The Euro has found little support from improving growth expectations as investors remain focused on the economic consequences of renewed instability in the Middle East.

Risk sentiment deteriorated after US President Donald Trump rejected Tehran’s latest proposal to pause hostilities and reopen the Strait of Hormuz. The setback has reduced expectations for an immediate de-escalation and restored some of the geopolitical premium that had recently been removed from energy markets.

Oil reacted by moving higher, with Brent Crude climbing back above the psychological $100-per-barrel threshold. For the Eurozone, the renewed rise in energy costs represents an additional challenge. Higher Oil prices threaten to intensify inflationary pressures while simultaneously increasing costs for economies already facing a difficult growth environment.

The Dollar, meanwhile, continues to benefit from a considerably stronger interest-rate backdrop.

Recent US economic data have reinforced expectations that the Federal Reserve could deliver additional rate increases, while Treasury yields remain close to multi-decade highs. The combination of resilient economic activity, persistent inflation concerns and higher energy prices has strengthened the argument for keeping US monetary policy restrictive.

That divergence remains particularly important for EUR/USD. Higher Treasury yields increase the relative attractiveness of Dollar-denominated assets, making it increasingly difficult for the Euro to stage a meaningful recovery despite improvements in parts of the Eurozone outlook.

Societe Generale maintains that the Dollar's near-term outlook remains constructive, particularly against currencies belonging to major energy-importing economies. The bank noted that the Euro has so far failed to benefit meaningfully from upgrades to growth expectations, highlighting the extent to which monetary policy and energy-market concerns continue to dominate currency trading.

The longer-term Dollar picture could become more complicated. Societe Generale sees US politics and changing global savings patterns potentially becoming headwinds over a two-to-ten-year horizon. However, those structural considerations currently appear secondary to the immediate combination of high US yields, Fed tightening expectations and renewed geopolitical uncertainty.

For EUR/USD, this leaves the near-term balance tilted toward further weakness. The 1.1360 area is now an important downside reference, while 1.1400 represents the immediate hurdle for any recovery. Unless the Euro can regain firmer ground above that threshold, sellers are likely to remain in control.

Technical Analysis

EUR/USD remains under sustained selling pressure on the four-hour chart, with the pair extending a broader sequence of lower highs and lower lows. Price is currently hovering around 1.1370, where sellers are challenging an important support zone around 1.1350–1.1370. This region previously provided the foundation for a strong recovery in late July, making the current test particularly significant.

The bearish structure has strengthened considerably since EUR/USD peaked above 1.1700. Successive declines have forced the pair beneath several important technical floors, most notably the 1.1560 and 1.1450 regions. Both areas have now shifted into resistance, while increasingly shallow rebounds indicate that buyers are struggling to regain control.

More recently, EUR/USD attempted to recover from the 1.1360 region but encountered selling pressure around 1.1400–1.1410. The resulting lower high suggests that sellers remain willing to enter on relatively modest rebounds. A decisive break and sustained four-hour close beneath 1.1350 would therefore reinforce the bearish setup and expose the 1.1300–1.1320 region.

Beyond there, the lack of substantial nearby support leaves scope for a deeper extension toward 1.1220–1.1230, which represents the primary downside objective highlighted by the current structure.

Nevertheless, some consolidation around present levels would not be surprising given the significance of the support being tested. A short-lived recovery toward 1.1400 could develop before another attempt lower. As long as price remains below 1.1450–1.1460, however, such rebounds are likely to remain corrective rather than signal a genuine trend reversal.

A recovery above 1.1460 would reduce immediate downside pressure, while a sustained move through the stronger 1.1560–1.1570 resistance zone would be required to materially challenge the prevailing bearish structure.

For now, the path of least resistance remains lower. The 1.1350 area is the key level to watch, with a confirmed breakdown potentially opening the next leg toward 1.1300 and ultimately the 1.1230 region.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.1355

STOP LOSS: 1.1420

TAKE PROFIT: 1.1230

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EUR/USD Bears Stay in Control as US Yields Remain Elevated

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