The Euro Remains Under Bearish Pressure Against a Strong US Dollar

The euro fell sharply against the U.S. dollar on Friday, extending losses that place the pair at its weakest levels in several weeks. The currency pair EUR/USD traded below 1.1600, with the euro hovering near 1.1550 in the European session.

Data released this week by FXStreet showed the eurozone’s inflation rate easing to 2.1% in October, aligning with expectations but offering limited support to the currency.

Meanwhile, the Federal Reserve signaled a reluctance to cut interest rates in the near term, which strengthened the dollar in global markets.

On the technical front, analysts note that EUR/USD has broken below key moving averages and is exposing support levels around 1.1550 and 1.1500.

A breach of 1.1450 is now suggested as a potential target if current momentum persists.

The divergence in monetary policy between the U.S. and the eurozone is a key factor in the shift.

The Fed’s higher-for-longer stance on rates contrasts with the European Central Bank’s caution amid slowing growth, reinforcing downward pressure on the euro, and yes, that's why the euro remains under bearish pressure against a strong us dollar, at least for the time being.

Looking back historically, the euro has been under intermittent pressure when global investors favour the dollar amid growth or interest-rate differentials.

Earlier this year, the euro fell to its lowest level since November 2022, driven by weak eurozone industrial data and strong U.S. macro outcomes.

As new data continues to emerge and central banks speak, traders are watching whether the euro can hold current support or face further depreciation.