FX.co ★ EUR/USD

The EUR/USD pair continued its decline for the 21st consecutive day, with only minor rebounds during this period, registering a cumulative drop of approximately 470 pips. This sustained decline began about a month ago when global markets built up active positions in anticipation of a widely expected interest rate hike by the Federal Open Market Committee (FOMC). Following the rate hike, market momentum took hold, with participants systematically buying the dollar under virtually any pretext. Analytically, this persistent one-sided price action is primarily driven by order flow—institutional investors accumulating large orders within a defined range, which are ultimately executed automatically, rendering short-term fundamentals largely irrelevant. For example, while no specific macroeconomic factors, aside from ongoing political and domestic budgetary challenges in France, prompted the market to sell the euro this week, the market perceived the structural fiscal deficit as a domestic problem within the Eurozone, completely ignoring the escalating debt problem and the soaring debt-to-GDP ratio in the United States. Even the release of the Federal Reserve's September meeting minutes failed to elicit the usual market reaction. The meeting minutes contained no extraordinary events, yet the dollar easily surged 60 points that day, baffling many macroeconomists who were forced to acknowledge that this was a result of market inertia rather than a logical explanation. Neither the European Central Bank's tight monetary policy, nor relatively strong regional economic indicators, nor disappointing US labor market data could prevent the dollar's decline. Previous bullish imbalances (such as the 19 imbalance indicator) lost their effectiveness and transformed into a bearish structural pattern. The euro now faces the risk of falling below the key psychological level of $1.10.

The buyers' repeated failure to maintain key structural volatility levels, and their inability to capitalize on weak US employment data, allowed sellers to take complete control of the market, even without reacting to subsequent imbalances (such as the 24 imbalance indicator), enabling them to continue pushing the price down. Despite the numerous remaining weaknesses in the US economy within the macroeconomic framework—including the immense strain on the federal budget due to record-high Treasury yields over the years, the general slowdown in GDP growth in recent quarters, the volatility of technology stock valuations driven by AI investment, and the potential for President Trump to reopen complex international trade disputes in 2026—market sentiment remains short-sightedly focused on the strength of the dollar. The traditional safe-haven catalysts that dominated the market in the first half of the year may have dissipated, but strong demand flows are still keeping short sellers in control in the short term. Looking ahead, bullish investors can pin their remaining technical hopes almost entirely on the next significant structural move around the 1.1066 level and on a substantial rebound that could be triggered by an influx of liquidity. However, active participants in the final session of US stock trading should closely monitor pre-close dollar buying.