The Euro continues to weaken at the start of the week, slipping back toward the 1.1600 level after failing to sustain Friday’s rebound above 1.1650. A cautious risk mood, combined with reduced expectations for Federal Reserve easing, is supporting the US Dollar and pressuring EUR/USD.
Global risk sentiment deteriorated during the Asian session as renewed tensions between China and Japan weighed on markets. Investors also remain focused on a backlog of delayed US macroeconomic releases—expected to begin rolling out this week—which is driving safe-haven demand for the Greenback.
Earlier Monday, ECB Vice President Luis de Guindos expressed confidence that Eurozone inflation is on track to reach the ECB’s target but flagged risks tied to tariffs, fiscal health, and abrupt shifts in sentiment. His remarks did little to lift the Euro.
In the US, President Donald Trump reversed tariffs on more than 200 imported goods, including coffee, bananas, and orange juice, citing inflation concerns and recent Democratic gains in local elections. Market reaction was limited.
Later today, traders will watch for the European Commission’s Eurozone economic growth forecasts, followed by the US Empire State Manufacturing Index and speeches from several Fed officials—Philip Jefferson, John Williams, Neel Kashkari, and Christopher Waller.
Euro Price Snapshot
The Euro weakened broadly, with the sharpest decline against the US Dollar and Canadian Dollar. Its only notable strength was against the Australian Dollar.
(A summarized table was provided showing EUR’s performance against major currencies.)
Market Movers: Risk-Off Tone Supports USD
- Investors remain cautious, awaiting key US data to better gauge economic momentum and the Fed’s policy path.
- Fed officials last week emphasized ongoing inflation risks, prompting traders to cut December rate-cut odds to 43%, down from 90% a month ago (CME FedWatch).
- Tensions escalated in Asia after Japanese PM Sanae Takaichi warned that an attack on Taiwan would trigger a military response. China subsequently advised citizens not to travel to Japan, further hurting risk sentiment.
- Italy’s CPI was confirmed at -0.3% month-on-month in October, with annual inflation easing to 1.2% from 1.6% in September.
- The US Empire State Manufacturing Index is expected to fall to 6.1 in November from 10.7.
- US Construction Spending, the first of several delayed reports, is forecast to show a fourth straight monthly decline (-0.1% in August).
Technical Analysis: EUR/USD Struggles Within Bearish Channel
EUR/USD failed to sustain a break above the descending channel drawn from early October highs and is reversing lower once again.
- Support: Immediate support sits at 1.1595–1.1600. A breakdown could expose the 1.1535–1.1545 zone (November 7, 10, 11 lows), followed by the November 5 low near 1.1470.
- Resistance: Upside attempts face trendline resistance at 1.1640, then the October 28–29 highs around 1.1670. A break above these levels is needed to challenge the October 17 high at 1.1730.
- Momentum: The 4-hour RSI is testing 50, while the MACD has crossed below its signal line—both pointing to weakening bullish momentum and the risk of deeper downside.
