EUR/USD under sustained pressure as markets await key data

The EUR/USD pair is declining for a fourth consecutive session, edging closer to the 1.1532 level. Investor sentiment remains cautious as markets digest recent trade developments and await a slew of high-impact economic data.

Over the weekend, the White House announced a de-escalation in trade tensions with China. Beijing has agreed to suspend additional export restrictions on rare earth metals and end investigations into US semiconductor companies. In return, the US will freeze certain existing tariffs and cancel a planned 100% tariff hike on Chinese exports. This decision follows last week's summit between Donald Trump and Xi Jinping, which aimed to stabilise bilateral relations.

Meanwhile, the protracted US government shutdown continues to delay the release of official key statistics, notably employment data. In their absence, market participants will seek guidance from private-sector indicators due in the coming days, including the ADP employment report, the ISM Services PMI, and the University of Michigan Consumer Sentiment Index.

This comes after the Federal Reserve's expected 25-basis-point rate cut last week. Chair Jerome Powell maintained a cautious stance, emphasising that a follow-up cut in December is not a foregone conclusion – a message that has provided underlying support for the US dollar.

Technical analysis: EUR/USD

Four-hour chart

On the H4 chart, EUR/USD formed a tight consolidation range around 1.1569. A subsequent downward breakout completed a bearish wave to 1.1521, and the pair is now consolidating above this local low.

A technical rebound to retest 1.1569 from below is a possibility. However, with bearish momentum still intact, we anticipate a further decline towards 1.1500 following any such pullback. The broader target for this move is 1.1488, which is viewed as the first leg of the third and typically strongest wave within the prevailing downtrend. The MACD indicator confirms this outlook, with its signal line positioned below zero and pointing decisively downward, reflecting sustained selling pressure.

One-hour chart

On the H1 chart, the pair broke downwards from a consolidation range around 1.1566, achieving its initial target at 1.1495. Once this level is reached, a corrective bounce towards 1.1533 is likely before the resumption of the downtrend towards 1.1468.

This scenario is supported by the Stochastic oscillator, whose signal line is below 50 and is falling confidently towards the 20 zone, indicating that short-term downward momentum remains dominant.

Conclusion

EUR/USD remains under clear selling pressure, with a de-escalation in US-China trade tensions and a cautiously hawkish Fed stance providing a supportive backdrop for the US dollar. Technically, the structure is bearish, suggesting that any near-term rebounds are likely to be corrective within a broader downtrend, with key downside targets at 1.1488 and 1.1468.