The euro extended losses, moving below the 1.1630 mark, as the U.S. dollar firmed its position in the foreign‑exchange market. This strength comes amid confidence that trade fears between the U.S. and China are diminishing.
On Tuesday, the EUR/USD pair traded around 1.1615, marking its third consecutive day of decline after peaking at 1.1728 last Friday. Investors welcomed the news that Donald Trump and Xi Jinping are set to meet next week in South Korea. Trump expressed optimism about securing a “fair deal” with Beijing and predicted a strong future relationship with China—moves that have bolstered the U.S. dollar.
In addition, the White House economic advisor Kevin Hassett announced that the U.S. federal government shutdown is likely to end “sometime this week.” This development could provide critical data ahead of the Federal Reserve’s policy meeting, where a 25‑basis‑point rate cut is widely expected.
Eurozone Snapshot
In the eurozone, the strength of the euro remains constrained. Although France’s Prime Minister Sébastien Lecornu survived a recent no‑confidence vote—offering some support for the currency—investors continue to note the government’s fragility and the significant challenges ahead, especially in passing a tightening budget through a divided parliament.
German economic data released Monday added to the caution. The producer price index (PPI) for September fell by 0.1% month‑on‑month, contrary to expectations of a 0.1% increase, while the year‑on‑year PPI declined 1.7% (following a 2.2% drop in August).
Technicals: EUR/USD Heading Toward 1.1600
From a technical perspective, EUR/USD broke below a reversal trend line at the 1.1640 area and returned to a bearish channel after rejecting the 1.1730 high last week. On the 4‑hour chart, the Relative Strength Index (RSI) has dropped below 50, and the Moving Average Convergence Divergence (MACD) is trending downward below the signal line—both signs of growing negative momentum.
The immediate bearish target is the October 15 low near 1.1600. If the down‑trend continues, the next levels of interest are the lows from October 9 and 14, around 1.1545, and subsequently the channel bottom near 1.1470. On the upside, resistance sits at Monday’s high of 1.1675 and Friday’s high of about 1.1730. A sustained break above these would ease the bearish bias and shift attention toward the October 1 peak around 1.1775.
