Euro extends losing streak against US Dollar, Fed-ECB policy eyed

• Euro falls further to near 1.1140 against the US Dollar as the former underperforms.
• A sharp recovery in French bond yields have revived bond market concerns.
• Both the Fed and the ECB are expected to leave interest rates unchanged this week.

The Euro (EUR) extends its losing streak against the US Dollar (USD) for the fifth trading day on Tuesday. The EUR/USD pair slumps to near 1.1140 as the Euro underperforms due to revival of concerns in French bond market.

Yields on French bonds have rebounded after a two-day correction. As of writing, 10-year French bond yields are up 1.42% to near 4.97%.

French bond yields correct in the past two days after Moody’s defied market expectations and maintained their Aa3 rating (negative outlook) on the sovereign.

Meanwhile, caution among market participants ahead of European Central Bank’s (ECB) monetary policy announcement on Thursday, and key economic releases such as preliminary German Harmonized Index of Consumer Prices (HICP) data for October and Q3 Gross Domestic Product (GDP) data on Friday has also weighed on the Euro.

Analysts at Commerzbank expect the ECB to leave its key interest rates unchanged. However, they caution that the pause may prove temporary, warning that “in December, however, it will likely raise rates once again due to persistently high inflation – unless French government bond yields do not completely spin out of control.”

Meanwhile, the continued strength in the US Dollar ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday has also weighed on the major currency pair. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.2% higher to near 102.20.

Economists at Deutsche Bank expect the upcoming Fed decision to be largely uneventful in terms of the formal communication, noting that “the statement itself [is] to contain only limited changes, although dissents to a hold are possible.” In their view, “the interest will therefore be in Chair Warsh’s press conference and how the Fed balances still-elevated inflation and solid growth against the recent tightening in financial conditions,” with markets likely to scrutinize his remarks for any shift in the policy narrative.

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1149, extending its decline below the short-term Moving Average Exponential (9, close, 0) at 1.1197, which now caps the pair as immediate resistance. Price holding under this average keeps the near-term bias bearish, while the Relative Strength Index (14) at 32 stays just above oversold territory, hinting that selling pressure persists but is not yet exhausted.

On the topside, initial resistance is defined by the 9-period exponential moving average near 1.1197, and a daily close above this barrier would be needed to ease the current downside tone. With no nearby technical supports derived from the provided dataset, the pair remains vulnerable to further slippage, with traders likely watching for fresh horizontal or price-action floors to emerge below 1.1149 before any meaningful recovery can develop.

(The technical analysis of this story was written with the help of an AI tool. Know more.)