EUR/USD Hits 17-Month Low Near. Why the Euro Keeps Losing to the Dollar
The euro has fallen to a 17-month low towards the US greenback. EUR/USD touched 1.1161 on Oct. 5, its weakest stage since May 2025.
The pair has misplaced greater than 3% in 5 weeks and traded close to 1.1182 on Monday. Analysts more and more see the slide as a euro downside fairly than a greenback story.
Why the Euro Keeps Losing to the Dollar
Four pressures are hitting the single forex without delay.
According to KBC, euro weak point has taken over from greenback energy as the fundamental driver. A hawkish Federal Reserve (Fed) began the drop in mid-September, however European issues carried it additional.
France sits at the middle. The hole between French and German 10-year yields has widened to ranges final seen in the 2012 debt disaster, as traders doubt the 2027 finances.
The stress can be spreading. Italy plans a wider deficit, whereas Spain heads to a snap election on Nov. 29.
Meanwhile, the Fed raised charges in September and signaled one other hike this yr. Even a weak payrolls print of 29,000 jobs lifted the euro for under a day.
The European Central Bank (ECB) affords little assist. It resumed mountain climbing early, however officers have since performed down an October transfer. At the identical time, Brent crude above $100 lifts inflation whereas threatening progress.
“The euro hasn’t been in a position to get traction.”
Jane Foley, head of FX technique at Rabobank, by way of Vantage
EUR/USD Charts Put 1.11 Support to the Test
On the weekly chart, the euro was rejected from the 1.18 resistance zone. It is now falling towards the 0.382 Fibonacci retracement at 1.1110, a former ceiling that become help in May 2025.
If that stage breaks, 1.08 comes subsequent. Below it sits the 0.618 golden pocket at 1.0509, with an ascending trendline from 2022 rising towards the space close to 1.07.
The Relative Strength Index (RSI) stands at 34 and continues to be falling. However, it’s nearing a help line that has held since 2022. A bounce from it might carry the euro again up towards the greenback.
The every day chart tells a extra bearish story. The pair has printed decrease highs and decrease lows since January inside a descending parallel channel.
The 20-day shifting common has repeatedly rejected retests from under, every time main to one other decrease high. It has not been examined since September and now sits close to 1.13, at the channel’s midline. A primary retest might finish in rejection.
The channel’s decrease band runs close to 1.10, barely under the 0.382 Fibonacci stage. As lengthy as the development stays bearish, the euro might maintain dropping floor.
Banks stay cut up. MUFG sees 1.10 if French spreads maintain widening, whereas ABN AMRO targets 1.15 by year-end. US inflation knowledge on Oct. 14 and the Fed and ECB conferences on Oct. 28 and 29 might resolve the subsequent transfer.
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