Chart of the Day: EUR/USD – September 29, 2025
By XTB Market Analysis Team
The EUR/USD currency pair, widely regarded as one of the most liquid and actively traded forex instruments, has recently come under selling pressure. As of September 29, 2025, the exchange rate has dipped below the key psychological level of 1.0600, which had previously served as a short-term support. This bearish move follows a broader flight-to-safety sentiment triggered by dovish monetary signals from European Central Bank (ECB) policymakers and rising geopolitical risks in Eastern Europe.
Technical Breakdown: EUR/USD Chart Analysis
The recent price action on EUR/USD reveals a significant deterioration in bullish momentum. After the pair attempted to consolidate above 1.0650, the failure to hold above this intermediate resistance zone ultimately resulted in a breakdown to lower support levels.
Key observations from the chart include:
– EUR/USD has formed a consistent downtrend since mid-September, marked by a series of lower highs and lower lows. This price pattern indicates sustained bearish control over the pair.
– The 200-period moving average on the H4 timeframe now sits firmly above price, acting as dynamic resistance. The inability to reclaim this average strengthens the bearish narrative.
– A descending triangle pattern has been forming over recent days, with a horizontal base near 1.0600. The breakdown from this triangle suggests further selling pressure ahead.
– RSI (Relative Strength Index) remains below the 50 midline, pointing to dominant bearish momentum.
– MACD (Moving Average Convergence Divergence) signals remain negative, with the signal line crossing below the zero line and histogram bars growing in the red zone.
From a technical perspective, EUR/USD faces the next meaningful support near 1.0530, which had previously provided minor reversals in April 2025. A decisive break below that level could signal a test of the March 2025 lows near 1.0480.
On the upside, any recovery attempts are likely to meet selling interest near the 1.0615 zone, followed by 1.0650, which now acts as a significant resistance following recent breakdowns.
Fundamental Drivers Behind the Move
The sharp bearish momentum is not simply a function of technical indicators. Much of the pressure on the euro comes from diverging monetary policy outlooks between the European Central Bank and the US Federal Reserve, as well as ongoing macroeconomic developments.
1. ECB’s Dovish Stance Signals Future Weakness
Several ECB policymakers have hinted that interest rate hikes have peaked and further tightening may not be necessary for the foreseeable future. In a recent speech, ECB board member Philip Lane stated that inflation is projected to ease more rapidly than initially expected, largely due to declining energy prices and slowing wage growth. This has led markets to discount the possibility of further ECB rate interventions.
Consequently, the euro has weakened, reflecting the expectation of a narrowing interest rate differential compared to the US dollar. With European growth slowing and inflation indicators softening, the ECB is under increasing pressure to maintain a loose monetary policy position.
2. US Federal Reserve Remains Cautiously Hawkish
In contrast to the ECB, the Federal Reserve of the United States continues to maintain a more hawkish stance as inflation remains above target in key sectors such as housing and services. Although the Fed has paused rate hikes in its last two meetings, strong economic data, notably durable goods orders and consumer confidence readings, suggests the possibility of resumed tightening.
The divergence in policy stance between the ECB and Fed has supported demand for the US dollar, a trend that is likely to persist if macroeconomic data from the United States remains strong.
3. Geopolitical Concerns Amplify Dollar Demand
Risk aversion is also playing a role in the dynamics of EUR/USD. Rising tensions in Eastern Europe, particularly related to border security incidents in the Baltic states, have reintroduced geopolitical uncertainty into financial markets. As a result, investors have
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