EUR/USD stayed under pressure on Wednesday as a firmer US Dollar kept the pair near 1.1337, close to Tuesday’s 1.1312 trough and its weakest level since May 2025. The Euro was heading for a September decline of more than 2%, and a monthly performance table indicated it was weakest against the Japanese Yen. Broader foreign exchange context showed the Euro as the currency of the 20 EU members in the Eurozone, and in 2022 it represented 31% of global FX activity with average daily turnover above $2.2tn.
On the monthly chart, EUR/USD remained above the 50-period SMA at 1.1008 and the 100-period SMA at 1.1200, but was still well below the 200-period SMA near 1.1838; RSI sat near 50 while MACD was marginally negative. The daily chart was softer, with price below the 50-day, 100-day and 200-day SMAs between 1.1521 and 1.1614, as RSI hovered around 23 and MACD stayed below zero. Resistance levels were flagged at 1.1400 and 1.1470, then 1.1521, 1.1532, 1.1614 and 1.1700, while support was at 1.1312.
Short-Term Technical Outlook and Trading Strategies
We enter October with the Euro on the defensive after a tough September where the currency lost over 2% of its value against the US Dollar. Derivative traders should closely monitor the immediate support floor at 1.1312, which represents the lowest level for the pair since May 2025. If this critical floor holds, we can anticipate a brief corrective bounce due to daily technical indicators like the RSI sitting deep in oversold territory at 23.
To capitalize on a potential short-term recovery, we suggest looking at near-term call options targeting the 1.1400 psychological mark. However, the broader trend remains highly bearish as the pair trades well below its 50-day and 100-day simple moving averages clustered up to 1.1614. For those looking to manage risk, establishing tight stop-losses near 1.1470 will be essential if a short-covering rally begins.
Macro Drivers and Medium-Term Positioning
This bearish momentum is backed by widening interest rate differentials, as the European Central Bank is pressured to cut rates further with Eurozone inflation falling to 1.8% and German manufacturing PMIs remaining contractionary under 45. Meanwhile, resilient U.S. economic data keeps the Federal Reserve’s benchmark rate comparatively high at 4.0%, supporting a stronger greenback. We believe these macroeconomic forces will keep the dollar dominant in the coming weeks.
For traders focused on the medium term, a decisive break below 1.1312 would signal an opportunity to buy put options to profit from further downward momentum. Given that EUR/USD accounts for roughly 30% of all global foreign exchange transactions, liquidity will remain high, allowing us to execute these derivative strategies with minimal slippage. We should remain patient and wait for confirmation at the key support level before committing to heavy directional bias.
