Euro stays pressured below 1.1350, near YTD low vs bullish USD ahead of US PCE, Q2 GDP
- EUR/USD sticks to a negative bias for the third straight day amid a combination of negative factors.
- ECB President Lagarde's dovish-leaning comments undermine the Euro amid the bullish USD tone.
- Fed hike bets and geopolitical uncertainties support the USD ahead of the key US PCE Price Index.
The EUR/USD pair remains under some selling pressure for the third straight day and trades around the 1.1330 region during the Asian session on Wednesday, near its lowest level since May 2025, which it touched the previous day. Moreover, the fundamental backdrop seems tilted in favor of bearish traders and suggests that the path of least resistance for spot prices is to he downside.
The European Central Bank (ECB) President Christine Lagarde's dovish-leaning comments on Tuesday leaned against market bets for another rate hike in October, which is seen as undermining the shared currency. The US Dollar (USD), on the other hand, retains its bullish bias near a two-month high and turns out to be another factor exerting some downward pressure on the EUR/USD pair.
The initial market reaction to New York Federal Reserve (Fed) President John Williams' comments on Tuesday, saying that the US central bank need not rush its next move, turns out to be short-lived as traders are still pricing in over a 90% chance of a rate hike by the year-end. Adding to this, the US-Iran standoff underpins the safe-haven buck and validates the negative outlook for the EUR/USD pair.
In fact, hopes for a diplomatic solution to end the US-Iran conflict faded after US President Donald Trump turned down a seven-day ceasefire proposal from Iran. Moreover, Qatari efforts to broker a US-Iran breakthrough have made little progress this week. In further developments, US officials believe that Trump could order a return to major combat against Iran after the midterm elections in November.
This keeps the geopolitical risk premium in play and favors USD bulls. Traders, however, might refrain from placing aggressive bets and opt to wait for the release of the US Personal Consumption Expenditures (PCE) Price Index. This will be accompanied by the final US Q2 GDP print, which will drive the USD and provide some impetus to the EUR/USD pair later during the North American session.
Meanwhile, the market focus will remain on the closely watched US monthly employment details – popularly known as the Nonfarm Payrolls (NFP) report, due on Friday. Apart from this, speeches from influential FOMC members will be looked to for cues about the Fed's policy path. The outlook, in turn, will help in determining the next leg of a directional move for the USD and the EUR/USD pair.
EUR/USD daily chart
Technical Analysis
The EUR/USD pair retains a bearish near-term bias following the overnight break through the 1.1350 horizontal support. Bears now await a subsequent weakness below the 1.1300 mark before positioning for further losses.
On the topside, the 1.1350 support breakpoint now seems to act as an immediate hurdle, above which the EUR/USD pair could aim to reclaim the 1.1400 mark. Any further move up, however, might still be seen as a selling opportunity and remain capped.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.06% | -0.14% | 0.41% | 0.58% | 0.39% | 0.75% | |
| EUR | -0.41% | -0.42% | -0.48% | 0.02% | 0.16% | -0.04% | 0.32% | |
| GBP | -0.06% | 0.42% | -0.27% | 0.38% | 0.52% | 0.35% | 0.70% | |
| JPY | 0.14% | 0.48% | 0.27% | 0.45% | 0.65% | 0.45% | 0.78% | |
| CAD | -0.41% | -0.02% | -0.38% | -0.45% | 0.21% | -0.04% | 0.34% | |
| AUD | -0.58% | -0.16% | -0.52% | -0.65% | -0.21% | -0.19% | 0.16% | |
| NZD | -0.39% | 0.04% | -0.35% | -0.45% | 0.04% | 0.19% | 0.35% | |
| CHF | -0.75% | -0.32% | -0.70% | -0.78% | -0.34% | -0.16% | -0.35% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
