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The EUR/USD pair extended its losing streak for the third consecutive session, trading near 1.1540 during Asian hours on Thursday. The decline follows renewed concerns about higher U.S. inflation, which has bolstered the dollar's appeal as investors anticipate potential Federal Reserve rate hikes. The pair's breakdown below key support at 1.1550 has intensified bearish momentum, with technical indicators suggesting further downside toward 1.1500. Traders are now monitoring U.S. inflation data and Fed speeches for clues about monetary policy direction. This move is critical for forex markets as the dollar's strength directly impacts global trade, commodity pricing, and emerging market currencies. A sustained EUR/USD decline could pressure European exporters and increase borrowing costs for debt-heavy economies. Gulf investors with significant USD-denominated assets may benefit from the dollar's rally, while those holding euros face currency depreciation risks. The 1.1500 level is now a key technical hurdle, with a break below it likely to trigger broader risk-off sentiment. Looking ahead, the focus shifts to the U.S. Federal Reserve's policy outlook and upcoming inflation reports. If inflation data exceeds expectations, the dollar could test multi-month highs against the euro. Technical analysis suggests a potential 3-5% correction for the EUR/USD in the near term. Traders should also watch for short-term volatility around the 1.1500-1.1450 range, with Fibonacci retracement levels providing potential entry points for both long and short positions.
