EURUSD Analysis Price Prediction: What’s Next for the Euro?

The EUR/USD pair is riding a wave of volatility as global markets face a whirlwind of risk-off sentiment. With geopolitical tensions simmering and economic uncertainty rising, the euro finds itself on shaky ground. The big question—will the US dollar continue to crush its rival, or will the euro manage to claw its way back?

Let’s dive deep into the action, focusing on support and resistance levels for EUR/USD on the daily chart and what the technical landscape tells us about the week ahead. We’ll also break down the impact of supply and demand zones, and how global events and central bank policies are setting the stage for the next big move in the world’s most traded currency pair.

EUR/USD Under Pressure: The Battle Below 1.0950

EUR/USD Bleeding Under a Stronger Dollar

The euro is in trouble. After four straight days in the red, EUR/USD is trading just above 1.0920 as the week kicks off. The downward pressure is relentless, and it’s all thanks to the US dollar’s strength. The greenback is flexing its muscles, fueled by a risk-off environment that has investors scrambling for safe-haven assets. The euro? Not looking so hot right now.

Geopolitics: Middle East and Taiwan Stir the Pot

What’s adding fuel to this fire? Geopolitics. Tensions are boiling over in the Middle East, with escalating conflicts that are shaking investor confidence. And as if that wasn’t enough, there’s the ever-looming China-Taiwan situation. Just on Monday, the US Department of State expressed “serious concern” about China’s military drills in the Taiwan Strait. When global uncertainty ticks up, so does the appeal of the US dollar. The euro, as a result, continues to get pummeled.

Technical Analysis: Key Support and Resistance Levels for EUR/USD

Support Zones – Where Buyers Might Step In

All eyes are on the 1.0900 level right now. It’s a critical line in the sand—break below it, and things could get messy for the euro. Traders are watching for a potential bounce here, but if that support gives way, we’re looking at the next stop around 1.0850, followed by 1.0800. These are not just random numbers; they represent key historical levels where buying interest has popped up before.

• Support 1: 1.0900 – the immediate battleground.
• Support 2: 1.0850 – the next defense line.
• Support 3: 1.0800 – long-term safety net.

Resistance Levels – Can the Euro Claw Its Way Back?

On the flip side, if EUR/USD manages to break above 1.0950, it might find some breathing room. That’s the first major resistance zone to keep an eye on. Should the pair rally beyond that, it could head toward 1.1000—a psychological barrier—and then target the 1.1050 level, where sellers have typically stepped in.

• Resistance 1: 1.0950 – the first hurdle.
• Resistance 2: 1.1000 – psychological resistance.
• Resistance 3: 1.1050 – key selling zone.

Supply and Demand: Where’s the Action?

Supply Zone – Sellers Ready to Pounce

The 1.0950-1.1000 zone is a major area where sellers are lurking. Every time the euro gets close to this range, it meets strong resistance. If the bulls manage to break through, it could spark a quick rally, but the supply zone is a significant roadblock that won’t be easy to overcome.

Demand Zone – Will Buyers Save the Day?

As for demand, 1.0900-1.0850 is where buyers might step in to prop up the euro. But if that fails, the pair could tumble down to 1.0800, a level that would likely trigger more aggressive buying. The real question is whether the demand here is strong enough to halt the decline or just a temporary speed bump on the road to more losses.

Global Factors Shaping EUR/USD: Tension, Rates, and More

Geopolitical Risks: Middle East Chaos and China-Taiwan Tensions

Geopolitical drama is keeping traders on edge. With the Middle East heating up and the China-Taiwan situation bubbling under the surface, investors are gravitating toward the US dollar as a safe haven. Any further escalation could keep this trend going, leaving the euro vulnerable to even more downside.

Federal Reserve: Eyes on November Rate Cut

Traders are now betting on a 25 basis points (bps) rate cut from the Federal Reserve (Fed) in November, especially after last week’s Producer Price Index (PPI) data. The CME FedWatch Tool shows that markets are pricing in nearly an 87% chance of this cut. A rate cut could potentially weaken the US dollar slightly, but for now, the dollar’s safe-haven appeal is the dominating force.

ECB Dovishness: The Euro’s Achilles Heel

Meanwhile, over in Europe, the ECB is not doing the euro any favors. With the Eurozone economy struggling and inflation cooling faster than expected, the ECB is likely to stick to its dovish stance. More interest rate cuts are expected, and that’s putting a heavy lid on any euro strength. This dovish outlook is making it difficult for the euro to gain any serious traction against the dollar.

What’s the Game Plan for EUR/USD Traders?

Bearish Sentiment Prevails

If you’re on the bearish side, you’ve got plenty of reasons to be confident right now. A break below 1.0900 would likely open the door to further losses, and if 1.0850 gives way, 1.0800 could be the next stop. With geopolitical tensions mounting and the ECB remaining dovish, the euro doesn’t seem to have much room to breathe.

Bulls Need to Break Above 1.0950

For the bulls, it’s all about reclaiming 1.0950. If the euro can break through that level, we could see some short-term relief, with the potential to push toward 1.1000. But the bulls have their work cut out for them, especially given the strength of the US dollar and the risk-off sentiment in the market.

No Time for Complacency: Keep an Eye on the Headlines

This week is going to be all about headlines. Whether it’s further developments in the Middle East, a sudden flare-up in China-Taiwan tensions, or fresh economic data from the US or Eurozone, anything could tip the scales. The US dollar is in the driver’s seat, and until something shifts, the euro is likely to remain on the defensive.

For now, the focus remains on the key support and resistance levels. Traders will be watching 1.0900 closely, as a break below could signal more pain for the euro. But with so many moving parts in the global economy, you’ll want to keep your eyes peeled for any changes in sentiment that could shake things up in a heartbeat.