The EUR/USD pair extended its losing streak on Tuesday, plunging to a three-month low just below 1.1500, pressured by renewed strength in the U.S. dollar and persistent uncertainty around Federal Reserve policy. Despite minor rebounds, the euro struggled to find traction as traders sought safety in the greenback amid volatile market sentiment.
At the technical level, the Relative Strength Index (RSI) on the 4-hour chart remains slightly below 40, signaling that momentum continues to favor sellers. Analysts say the pair would need a sustained push above 1.1550 to indicate a potential recovery.
Key Technical Levels:
- Support: 1.1500 (78.6% Fibonacci retracement), 1.1450, 1.1400
- Resistance: 1.1550, 1.1615 (20-day SMA), 1.1660 (100-day SMA)
Traders are also keeping a close eye on comments from central bank officials, with no major data releases expected to shift sentiment in the near term.
Fed Remarks Support Dollar Strength
The dollar held firm after several Federal Reserve policymakers struck a cautious tone on the timing of rate cuts. Chicago Fed President Austan Goolsbee said on Monday he would be “uneasy” about front-loading monetary easing, while San Francisco Fed President Mary Daly noted she remained “open-minded” about December’s policy decision.
These remarks reinforced the perception that the Fed will adopt a data-dependent approach, potentially delaying further rate cuts. The hawkish undertone provided fresh support for the greenback, keeping the euro under sustained pressure.
Meanwhile, U.S. economic data painted a mixed picture. The Institute for Supply Management’s (ISM) Manufacturing PMI declined to 48.7 in October from 49.1 in September, signaling continued contraction. The Employment Index rose modestly to 46, while the Prices Paid Index fell to 58 from 61.9, reflecting easing cost pressures.
While the data didn’t significantly boost the dollar, it underscored the uneven nature of the U.S. recovery and justified the Fed’s cautious stance.
Market Outlook Remains Bearish
With no high-impact economic releases scheduled for Tuesday, market sentiment will likely hinge on U.S. equity performance and investor risk appetite. Futures tied to major Wall Street indices were down between 0.65% and 1.3% early in the European session, reflecting broad caution.
A continued risk-off tone could attract more buyers to the dollar as a safe-haven asset, keeping EUR/USD under pressure throughout the day.
For now, the euro remains vulnerable to further declines, with traders eyeing a possible test of 1.1450 if the pair fails to reclaim the 1.1550 resistance zone.