EUR/USD Extends Losses as Dollar Strength Weighs Again

Key Moments

EUR/USD trades around 1.1365 after hitting its lowest level in over a year, marking a third consecutive daily decline.
Stronger expectations for a Fed rate hike and ongoing US-Iran uncertainty have driven the USD Index to a 13-month high.
Technical signals remain bearish, but an oversold 4-hour RSI near 21 suggests potential for consolidation or a short-term bounce.

EUR/USD Under Pressure as Dollar Rally Extends

The EUR/USD pair continues to lose ground for a third straight session, adding to a broader stretch in which it has fallen in five of the last six days. During Asian trading on Wednesday, the pair touched its weakest level in more than a year before stabilizing near the 1.1365 area, down nearly 0.15% on the day. The backdrop of a firm US Dollar keeps the currency pair biased to the downside.

Fed Expectations and Geopolitics Support USD Strength

Market participants have increased bets that the US Federal Reserve will raise interest rates by the end of this year in response to persistent inflation pressures. At the same time, mixed signals regarding US-Iran developments around Tehran’s nuclear program are helping to maintain geopolitical risk premiums. This combination has lifted the US Dollar Index (DXY), which measures the Greenback against a basket of major currencies, to its highest level in 13 months.

The USD’s advance has overshadowed the European Central Bank’s hawkish messaging, leaving the euro under sustained pressure and weighing on EUR/USD.

Technical Setup: Bearish Bias Dominates, But Momentum Is Stretched

From a technical standpoint, EUR/USD’s inability to secure a move above the 100-period Simple Moving Average on the 4-hour chart, combined with a decisive drop below the 1.1500 psychological level, has reinforced the bearish narrative.

Momentum indicators are aligned with this negative backdrop. The 14-period Relative Strength Index on the 4-hour chart is stuck in oversold territory near 21, while the Moving Average Convergence Divergence histogram remains in negative territory, pointing to enduring downside pressure.

However, the extremely low RSI reading and a MACD that is still negative but showing signs of stabilizing indicate that selling momentum could begin to fade. This setup suggests that waiting for either a period of sideways consolidation or a corrective rebound might be prudent before looking for an extension of the downtrend.

Key Levels to Watch for EUR/USD

Any recovery attempt is likely to encounter strong resistance around the 100-day Simple Moving Average, currently near 1.1544. The pair would need to reclaim this level to alleviate immediate downside pressure and shift the near-term outlook more in favor of euro buyers.

Until that happens, the broader tone remains negative, with the pair vulnerable to further weakness while the US Dollar stays supported by rate expectations and geopolitical factors.

(The technical analysis of this story was written with the help of an AI tool.)

US Dollar Performance Over the Last 7 Days

The table below summarizes the percentage change of the US Dollar against major currencies over the past seven days, as well as the cross-moves among those currencies. Over this period, the US Dollar showed the strongest performance versus the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		2.16%	1.78%	0.81%	1.58%	2.36%	3.16%	2.19%
EUR	-2.16%		-0.38%	-1.49%	-0.58%	0.20%	0.97%	0.03%
GBP	-1.78%	0.38%		-1.04%	-0.19%	0.59%	1.39%	0.40%
JPY	-0.81%	1.49%	1.04%		0.89%	1.65%	2.47%	1.48%
CAD	-1.58%	0.58%	0.19%	-0.89%		0.77%	1.57%	0.60%
AUD	-2.36%	-0.20%	-0.59%	-1.65%	-0.77%		0.79%	-0.19%
NZD	-3.16%	-0.97%	-1.39%	-2.47%	-1.57%	-0.79%		-0.97%
CHF	-2.19%	-0.03%	-0.40%	-1.48%	-0.60%	0.19%	0.97%

The heat map illustrates the percentage moves between major currency pairs. The base currency is listed on the left, and the quote currency appears across the top. For instance, choosing the US Dollar in the left-hand column and moving horizontally to the Japanese Yen cell shows the percentage change for USD (base)/JPY (quote).