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The EUR/USD pair has fallen to a session low of 1.1593, extending its decline after failing to hold above key resistance levels. Early gains above 1.1655 were short-lived as buyers faced resistance near the 100-hour moving average. The breakdown below the 50% Fibonacci retracement level at 1.16287 and the swing support zone between 1.1605-1.16159 has shifted momentum decisively to sellers. The next critical target is the 61.8% retracement at 1.15768, with a break below this level likely to accelerate bearish momentum.
The move is being driven by a combination of technical breakdowns and macroeconomic factors. Rising US 10-year yields (up 5.2 basis points to 4.675%) and a weaker US stock market have strengthened the dollar broadly. However, crude oil's underperformance (-0.78% on the day) has limited inflation-driven support for commodity-linked currencies. Traders are now monitoring the 61.8% retracement level as the next key technical target, with the 50% midpoint at 1.16287 acting as a critical near-term resistance for any potential bounce.
For Gulf investors, the EUR/USD breakdown signals a potential continuation of the bearish trend, especially if the 1.15768 level is breached. The technical setup suggests sellers maintain control as long as prices stay below 1.16287. Traders should watch for confirmation of a breakdown below 1.15768 and the 100-hour moving average as key indicators of further weakness. The dollar's strength against the euro could also influence cross-currency pairs in the Gulf region.
