The EUR/USD pair remains under mild selling pressure, trading around 1.1565 during Monday’s early European session. The pair continues to face headwinds as the US Dollar (USD) gains ground amid optimism that the US government shutdown may soon end.
According to Reuters, the US Senate advanced a government funding bill, voting 60–40 in favor of extending enhanced Affordable Care Act subsidies — a move seen as progress toward ending the shutdown. The bill still needs approval from the House of Representatives and the signature of President Donald Trump, a process expected to take several days. Meanwhile, traders await the release of the Eurozone Sentix Investor Confidence Index for November later in the day.
Technical Outlook
From a technical standpoint, EUR/USD maintains a bearish bias as long as it trades below the 100-day Exponential Moving Average (EMA), currently near 1.1575. The 14-day Relative Strength Index (RSI) hovers below the neutral 50 level at around 44.95, signaling that further downside remains likely in the near term.
- Immediate resistance: 1.1575 (100-day EMA)
- Next resistance: 1.1668 (October 28 high)
- Key hurdle: 1.1700–1.1705 zone (psychological level / upper Bollinger Band boundary)
On the downside, initial support lies at 1.1468 (November 5 low). A break below this level could open the door toward 1.1403 (July 31 low) and then 1.1364 (June 3 low).
Euro Fundamentals
What is the Euro?
The Euro (EUR) is the common currency of 20 European Union member countries forming the Eurozone. It is the second most traded currency globally, behind the US Dollar, and accounted for about 31% of all FX transactions in 2022, with daily turnover exceeding $2.2 trillion. The EUR/USD pair alone makes up roughly 30% of total forex trading volume.
Role of the European Central Bank (ECB):
Based in Frankfurt, the ECB governs monetary policy across the Eurozone. Its main objective is to maintain price stability, typically aiming for inflation near 2%. The ECB influences the Euro primarily through interest rate decisions — higher rates tend to strengthen the Euro, while lower rates generally weaken it.
Impact of Inflation and Economic Data:
Key Eurozone data such as inflation (HICP), GDP growth, PMIs, employment, and consumer confidence play major roles in determining the Euro’s direction. Stronger-than-expected data boosts the currency as it raises the likelihood of tighter ECB policy, while weaker data has the opposite effect.
Trade Balance Influence:
The Trade Balance — the difference between exports and imports — also affects the Euro. A positive balance supports the currency by increasing foreign demand for Eurozone goods, while a negative balance can weigh on it.
In summary:
The EUR/USD pair remains under pressure as the bearish technical setup holds below the 100-day EMA. Unless the pair breaks decisively above 1.1575, the path of least resistance continues to point lower toward the 1.1468–1.1400 region.
