EUR/USD Forecast: Euro bears return following Friday's meager recovery

EUR/USD has turned south at the start of the week.
Safe-haven flows dominate the financial markets on Monday.
US Dollar Index regains traction following Friday's choppy action.

Eren Sengezer FXStreet

EUR/USD has failed to build on Friday's modest recovery gains early Monday and started to push lower toward 1.0100. In the absence of high-tier macroeconomic data releases, the market mood is likely to impact the pair's action.

Renewed concerns over China reinstating coronavirus-related lockdowns weigh on market mood at the beginning of the week. Additionally, Nord Stream 1 gas pipeline shut down for a scheduled 10-day maintenance. Although this is an annual occurrence, investors are worried that Russia could see this as an opportunity to further trim its energy exports to Europe by delaying the reopening.

Reflecting the risk-averse atmosphere, the Euro Stoxx 600 Index is down nearly 1% and US stock index futures are losing between 0.6% and 0.9%. Meanwhile, the US Dollar Index is up 0.65% at 107.60, reflecting the positive impact of risk aversion on the greenback's valuation.

On the other hand, the CME Group FedWatch Tool shows that markets are pricing in nearly a 30% probability, up from 13% a week ago, of the Fed hiking its policy rate by 75 basis points (bps) again in September after a 75 bps hike in July. The stronger-than-expected Nonfarm Payroll (NFP) data seems to be causing investors to reassess the Fed's rate outlook.

The recession next time, US employers hang tough with jobs.

EUR/USD Technical Analysis

Following Friday's rebound, EUR/USD has returned with its descending regression channel coming from late June, suggesting that the bearish bias stays intact. In the meantime, the Relative Strength Index (RSI) indicator on the four-hour chart stays near 30, showing that buyers remain on the sidelines.

On the downside, 1.0100 (psychological level) aligns as interim support ahead of 1.0070 (static level) and 1.0000. Resistances are located at 1.0150 (upper limit of the descending regression channel), 1.0175 (20-period SMA) and 1.0200 (static level, psychological level).

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD risks a deeper drop below 1.1750

EUR/USD keeps its vacillating mood in place as the the NA session drwas to a close on Tuesday, hovering below the 1.1800 hurdle amid acceptable gains in the US Dollar. In the meantime, market participants and the FX galaxy are expected to closely follow President Trump’s SOTU speech around 2AM GMT.

GBP/USD regains 1.3500 and above

GBP/USD extends its advance for the third day in a row on Tuesday, this time retesting the area beyond the 1.3500 hurdle. Cable’s uptick comes despite decent gains in the Greenback and the dovish message from the BoE’s Bailey at the UK Parliament.

Gold appears offered around $5,150

Gold is giving back a good portion of the recent multi-day rally, receding to the $5,150 zone per troy ounce amid the decent bounce in the US Dollar and mixed US Treasuty yields. In the meantime, markets’ attention remain on upcoming comments from Fed speakers.

Ripple’s DeFi shift in focus: Navigating XRPL EVM sidechain growth, XRPFi migration and liquidity

Ripple (XRP) has continued to trade under pressure, extending its decline by approximately 63% from the record high of $3.66 in July. The remittance token is trading above support at $1.35, while its upside appears limited by key supply zones, starting with $1.40, at the time of writing on Tuesday.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.