EUR/USD Falls Toward 1.1140 as French Debt Concerns Resurface

Traders' Opinions

Summary:

EUR/USD extends its decline toward 1.1140 as French bond yields rebound and the US Dollar strengthens ahead of the Fed and ECB meetings. Markets are watching central bank guidance and upcoming German inflation and Eurozone GDP data for fresh direction.

SELL EURUSD

EXP

TRADING

1.11400

Entry Price

1.09500

1.13000

1.11367 -0.00361 -0.32%

0.0

Pips

Flat

1.09500

Exit Price

1.11400

Entry Price

1.13000

EUR/USD fell for a fifth consecutive trading day on Tuesday, approaching 1.1140 as renewed pressure in France’s bond market and a stronger US Dollar weighed on the Euro. With the European Central Bank (ECB) and Federal Reserve (Fed) policy decisions approaching, investors are becoming increasingly cautious, leaving the single currency vulnerable to further losses.

French sovereign debt concerns have resurfaced after a brief two-day relief rally. France’s 10-year government bond yield climbed 1.42% to approximately 4.97%, reversing some of the improvement that followed Moody’s decision to maintain the country’s Aa3 credit rating with a negative outlook. The renewed rise in yields is adding pressure to the Euro, as investors remain alert to the potential consequences of France’s fiscal and political challenges.

The ECB’s Thursday meeting is another source of uncertainty. Commerzbank expects policymakers to leave interest rates unchanged for now but sees a possible increase in December if inflation remains elevated and French bond market conditions remain under control. Investors are also awaiting preliminary German Harmonized Index of Consumer Prices data for October and third-quarter GDP figures on Friday, which could provide further insight into the Eurozone’s economic and inflation outlook.

Meanwhile, the US Dollar has strengthened ahead of Wednesday’s Fed announcement. The US Dollar Index rose 0.2% to around 102.20, adding to the pressure on EUR/USD. Deutsche Bank expects limited changes to the Fed’s formal statement, with attention instead likely to focus on Chair Kevin Warsh’s press conference. Investors will be looking for clues on how policymakers balance persistent inflation and solid growth against tighter financial conditions.

The near-term outlook for EUR/USD remains challenging as the pair faces pressure from both sides of the Atlantic. A cautious ECB stance, renewed French debt concerns and continued Dollar strength could extend the decline. However, the Fed’s communication and upcoming European economic releases may alter expectations, particularly if policymakers signal a different path for future interest rates.

Technical Analysis

EUR/USD remains under strong bearish pressure on the H4 timeframe, with price declining from the 1.1480 region and forming a consistent sequence of lower highs and lower lows. The pair has broken through several support zones during the sell-off, and the recent consolidation between approximately 1.1110 and 1.1250 appears to be losing its footing. Trading around 1.1146, price is testing the lower boundary of this range, suggesting sellers may be preparing for another downside move.

The key near-term resistance zone sits around 1.1175–1.1190, where previous support could now act as a barrier to recovery. Above that, the 1.1240–1.1270 area remains a stronger resistance region, and a move back toward it would likely require a meaningful improvement in buying momentum. On the downside, a decisive break below the recent lows around 1.1110–1.1120 would strengthen the bearish continuation scenario. The chart’s projected path points toward the 1.0940–1.0950 region if selling pressure accelerates and the current support fails.

The technical bias remains bearish while EUR/USD trades below 1.1190 and continues to produce lower highs. A brief rebound or retest of broken support remains possible, so confirmation below the recent lows would strengthen the setup. Conversely, a sustained recovery above 1.1270 would weaken the immediate bearish structure and suggest that the pair may be entering a deeper corrective phase. With price near support, traders should be mindful of potential short-term volatility rather than assuming the projected decline will occur in a straight line.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.1140

STOP LOSS: 1.1300

TAKE PROFIT: 1.0950

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