FX.co ★ EUR/USD

The euro held steady against the dollar on Monday, supported by an upward revision to manufacturing activity indicators in the eurozone and growing market caution ahead of the U.S. midterm congressional elections. Despite this supportive backdrop, the EUR/USD pair struggled to break through the key psychological level of 1.1200, keeping its movement within a neutral range—between an 18-month low reached on Thursday (just above 1.1100) and a strong resistance zone between 1.1255 and 1.1285. The upward revision to the eurozone’s manufacturing Purchasing Managers' Index (PMI) for October provided an initial boost to the euro, reinforcing earlier gains driven by investor hesitation ahead of Tuesday’s critical U.S. congressional vote. However, the upward momentum for the EUR/USD pair faded noticeably as market participants refocused on potential fiscal vulnerabilities within key member states. A notable source of tension was an unscheduled review of French sovereign debt by the credit rating agency Fitch, which downgraded its outlook from "stable" to "negative," signaling a potential credit rating revision before the end of February. Chris Turner, Global Head of Markets at ING, noted that market observers will be watching closely to see whether this unexpected outlook revision leads to a widening spread between French government bonds (OATs) and German government bonds. Turner added that these financial concerns within the Eurozone effectively limit the potential for a broader recovery in the EUR/USD pair, even though lower energy costs typically bolster the Eurozone’s trade balance. From a technical perspective, the EUR/USD continues to trade near the 1.1220 level. While the current price structure remains tilted to the downside, short-term momentum indicators suggest that selling pressure is beginning to ease. The four-hour Relative Strength Index (RSI) has rebounded to 46.5—moving out of oversold territory—though it remains below the neutral 50-level mark. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram has edged into positive territory, signaling a slowdown in the prevailing downtrend rather than confirming a full structural reversal. On the upside, buyers face immediate selling pressure between the October 22 high of 1.1256 and the October 2 high of 1.1285. A decisive bullish breakout above this resistance zone would bring the June reaction low—near 1.1325—into focus; this level aligns closely with the 38.2% Fibonacci retracement of the recent high-to-low price move, which sits at 1.1337. Conversely, on the downside, a break below Friday’s low of 1.1104 could trigger renewed selling interest, exposing a structural low near 1.1050—seen in May 2025—before reaching the key psychological level of 1.1000.