The EUR/USD pair is trading near 1.1310 during Thursday’s European session, extending its recent decline as demand for the U.S. Dollar remains firm. The pair is approaching the psychologically important 1.1300 level, with the daily chart showing a clear bearish structure. The U.S. Dollar Index (DXY) is trading close to its yearly high near 101.80, while elevated U.S. Treasury yields continue to support the greenback. The latest U.S. PCE inflation report showed moderate monthly price growth, but the data has not eliminated expectations for restrictive Federal Reserve policy.
U.S. Yields Keep Dollar Supported
The U.S. Dollar has retained its advantage as investors assess the outlook for Federal Reserve interest rates and the U.S. economy. The latest PCE report showed the headline PCE price index rising 0.3% in August, while core PCE increased 0.2%. Core inflation was up 3.0% from a year earlier.
At the same time, U.S. consumer demand remained strong. Personal consumption expenditures increased 0.9% in August, while real PCE rose 0.6%. That combination of continued spending and persistent inflation can complicate the Federal Reserve’s policy decisions.
The result has been continued attention on U.S. Treasury yields, which can increase the appeal of dollar-denominated assets relative to the euro.
For EUR/USD, the immediate macro focus is therefore split between U.S. monetary policy and incoming euro-area inflation data.
EUR/USD Tests 1.1300 Support
On the daily chart, EUR/USD trades around 1.1314, below the 20-period EMA at 1.1448. The distance from that moving average indicates that sellers continue to control the near-term structure.
The Relative Strength Index (RSI) is near 21.8, placing the pair firmly in oversold territory. That condition can precede periods of consolidation or a corrective rebound, although it does not by itself confirm that the broader downtrend has ended.
The principal technical levels are:
- Immediate resistance: 1.1325
- 20-period EMA: 1.1448
- Breakdown level: 1.1300
- Major support: 1.1200
A decisive move below 1.1300 would expose the 1.1200 area as the next major downside reference. Conversely, reclaiming 1.1325 would provide the first indication that selling pressure is easing, while a move above the 20-period EMA at 1.1448 would represent a more substantial technical improvement.
Euro Inflation Becomes Next Catalyst
The euro is facing a separate test from incoming Eurozone inflation data. The European Central Bank’s release calendar shows that the September 2026 HICP flash estimate is scheduled for October 2.
The inflation report will give traders another indication of price pressures across the euro area and could influence expectations for European Central Bank policy.
Recent ECB data showed euro-area headline HICP inflation at 3.3% in August, up from 2.9% in July, largely reflecting higher energy inflation. Core inflation excluding food and energy eased to 2.4%.
Conclusion
EUR/USD remains under pressure near 1.1310 as the U.S. Dollar benefits from elevated Treasury yields and expectations for restrictive monetary policy. The pair’s 1.1300 level is now the key technical threshold. A confirmed break could expose 1.1200, while 1.1325 and the 20-period EMA at 1.1448 define the first recovery barriers. With euro-area September inflation due on October 2, the next major test for the pair will come from whether incoming data changes expectations for monetary policy on either side of the Atlantic.
Sources & Methodology
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