EUR/USD Forecast – 01 October 2025
By: Christopher Lewis
The EUR/USD pair experienced notable pressure during Tuesday’s trading session (September 30, 2025), as the US dollar continued to gain strength against the Euro. The exchange rate dropped toward the crucial 1.04 level, reinforcing the ongoing bearish sentiment prevailing in the currency markets. This development prompts traders and investors alike to reassess the technical and fundamental dynamics influencing this pair.
This in-depth analysis will explore the market behavior, underlying technical indicators, and key levels to watch as the EUR/USD pair moves into October 2025.
Overview of Recent Price Action
The EUR/USD currency pair has been in a sustained downtrend over recent sessions. The struggles of the Euro against the US dollar reflect contrasting monetary policy paths and economic metrics between the European Central Bank (ECB) and the Federal Reserve (Fed). On Tuesday, the pair recorded a meaningful decline as it approached a critical support zone.
– The exchange rate continued its downward slide as strong economic indicators from the United States propelled the US dollar higher.
– Strength in US Treasury yields and robust macroeconomic data continue to support the greenback.
– The Euro remains under pressure following dovish rhetoric from ECB officials and concerns over stagnant economic growth in the Eurozone.
– The 1.04 level is proving to be not just psychological but also technically significant, offering potential support or breakdown scenarios depending on market reaction in the coming sessions.
Current Technical Outlook
From a technical perspective, the EUR/USD pair remains in a bearish configuration. Price action on Tuesday displayed continued downside momentum, confirming the pair’s path of least resistance.
Key observations from the technical chart:
– The 1.05 level previously acted as a short-term support but has now been breached with conviction, turning it into resistance.
– The pair now approaches the 1.04 handle, which has historically acted as a major technical barrier. This level will serve as a crucial litmus test for bullish or bearish continuation.
– Given the market’s long-term downtrend, rallies are still viewed as opportunities to “sell the rally” rather than conventional breakout plays.
– Technical indicators including the Relative Strength Index (RSI) and moving averages favor bearish continuation, especially under the 200-day EMA.
Moving Averages
– The 50-day Exponential Moving Average (EMA) is currently sloping downward, serving as dynamic resistance above the current price range.
– The 200-day EMA is located significantly above current price action, signifying a prolonged bearish trend in the broader context.
– Price action consistently staying below both these EMAs reflects bearish market structure and continued selling pressure.
Support and Resistance Levels to Watch
Support Levels
– 1.0400: This psychological and technical level is a short-term battleground. Traders will closely watch whether the pair stabilizes or breaks below this zone.
– 1.0350: If 1.04 fails to hold, 1.0350 becomes the next major level of interest, which has offered support in previous cycles.
– 1.0300: A key historical level, its breach could open the door to deeper downside extensions, possibly even to parity over extended timelines.
Resistance Levels
– 1.0500: Now flipped from support to resistance, this level needs to be reclaimed before any upside potential is considered.
– 1.0560: Additional overhead resistance that has previously offered significant supply pressure.
– 1.0600: Acts as a secondary resistance level, aligning closely with the 50-day EMA and trendline confluence.
Fundamental Drivers Influencing EUR/USD
The current slide in the EUR/USD exchange rate is being driven by divergent economic fundamentals between the United States and the Eurozone. Let’s break down the key factors at play.
Bullish US Dollar Factors
– Strong U.S. economic indicators including
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