Title: EUR/USD Leads the Downside Amid Broader USD Strength
Original Source: Analysis by Yohay Elam, FXStreet
Link to the original article: https://www.fxstreet.com/analysis/eur-usd-is-leading-to-the-downside-video-202510131346
The Euro continues to trend lower against the US Dollar, as the EUR/USD currency pair reinforces its position at the forefront of a broader US dollar uptrend. In recent forex market developments, this pair has demonstrated considerable downside momentum, moving firmly below key support levels. According to Yohay Elam’s analysis on FXStreet, EUR/USD continues to weaken due to a combination of technical and fundamental factors that currently favor the greenback.
Below is an expanded review of the original analysis, integrating additional market context, updated technical perspectives, and fundamental influences that are driving currency action well beyond the pivotal trading zones.
Market Environment and Dollar Demand
The US dollar has maintained its strength across the board, not just against the euro. The dollar index (DXY), which measures the greenback against a basket of major currencies, has accelerated past recent resistance levels as investors rotate back into the safety of US assets.
Key contributors to dollar strength include:
– Higher US Treasury yields amid ongoing concerns of persistent inflation
– Hawkish tone from the Federal Reserve, signaling a longer timeline for elevated interest rates
– Stronger-than-expected US economic data, particularly in the labor market and consumer spending
– Renewed global risk aversion due to geopolitical tensions and slowing growth outside the United States
The combination of those factors reinforces the dollar’s appeal, as yield differentials widen in favor of the US economy.
EUR/USD in Focus: Primary Dynamics
Among major currency pairs, the EUR/USD is the one showing the clearest downward movement in alignment with dollar strength. According to Yohay Elam’s assessment, not only is the pair pointing lower, but it is also leading other USD pairs in establishing new technical lows.
Several forces are putting pressure on the euro:
– Weak economic data out of the Eurozone, especially from Germany and France
– Diverging central bank policies, as the European Central Bank (ECB) adopts a more cautious tone
– Lack of inflationary momentum within the euro area
– Political uncertainties in certain EU member states, raising concerns over policy fragmentation
Technical Breakdown: EUR/USD Price Structure
EUR/USD had previously hovered near the 1.0600–1.0650 region, a midterm support area, before breaking decisively lower. The pair is now trading below this critical zone, confirming a bearish technical structure.
From the chart-based perspective, Yohay Elam’s analysis highlights the following:
– The pair broke beneath an important trendline that had provided support through multiple sessions.
– Resistance is gathering strength near the 1.0600 mark, which now serves as a potential ceiling.
– The downtrend is supported by momentum indicators such as the Relative Strength Index (RSI), which remain in bearish territory without reaching oversold conditions.
– Moving averages (particularly the 50-day and 100-day) are sloping downward, and the price is holding below these dynamic resistance areas, confirming sustained downside pressure.
According to Elam, the bearish trend is structurally sound and not just a minor correction of a previous uptrend.
Next Support Zones to Watch
With 1.0600 now acting as a firm resistance level, attention turns to the next possible support levels. Traders and analysts are eyeing the following price points:
– 1.0500: A psychological round number and former support point that could invite a technical bounce
– 1.0450: A multi-week interim low seen during a prior wave of euro weakness
– 1.0350: Near the lowest levels seen in 2023 before monetary policy shifts began to influence the pair
In the event market sentiment deteriorates further, or interest rate differentials widen more in favor of the US, these lower
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