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EUR/USD Extends Losing Streak as Fed’s Hawkish Tone Strengthens Dollar; Eyes on U.S. Manufacturing Data
Technical Analysis
Summary:
The euro continued its decline against the U.S. dollar on Monday, marking a fourth straight day of losses as markets react to the Federal Reserve’s hawkish stance and fading Eurozone momentum.
Sell
TradingEURUSD
EXP
1.15100
Entry Price
1.13730
TP
1.15800
SL
1.15191 -0.00170 -0.15%
0
Point
Flat
1.13730
TP
CLOSING
1.15100
Entry Price
1.15800
SL
The euro extended its downtrend against the U.S. dollar for the fourth consecutive session on Monday, slipping to 1.1515 at the time of writing — just above fresh multi-month lows near the 1.1500 level. Despite data showing that Eurozone manufacturing activity improved marginally in October, the single currency failed to find any meaningful support, as the U.S. dollar remains buoyed by strong demand following the Federal Reserve’s recent policy tone.
The Fed’s Chair, Jerome Powell, struck a notably cautious tone last week, tempering market expectations for additional rate cuts in December. His remarks, emphasizing data dependency and concern about inflation’s “sticky” nature, signaled that the central bank remains reluctant to ease prematurely. That message has strengthened the greenback and weighed heavily on risk sentiment, extending into the start of the new trading week.
In Europe, fresh data from HCOB confirmed that the Eurozone Manufacturing Purchasing Managers’ Index (PMI) improved modestly to 50.0 in October, up from 49.8 in September — its first time reaching the neutral growth threshold in months. The print suggests that the region’s industrial slowdown might be stabilizing, but analysts remain unconvinced that a sustained recovery is underway.
The marginal uptick was largely attributed to easing supply bottlenecks and tentative improvements in demand. However, underlying challenges persist, particularly in Germany and France, where new orders continue to contract amid weak global trade and subdued domestic consumption. The slight rebound was therefore insufficient to shift the broader narrative of stagnation in the Eurozone’s manufacturing sector.
Adding to the cautious tone, Joachim Nagel, President of the Deutsche Bundesbank and member of the European Central Bank’s (ECB) Governing Council, remarked on Monday that recent data remains broadly in line with the ECB’s forecasts. He reaffirmed that “all options remain open” ahead of the next monetary policy meeting — a statement markets interpreted as a sign the ECB is likely to maintain its current stance, leaving rates unchanged while monitoring inflation progress.
Across the Atlantic, the U.S. dollar has remained the primary beneficiary of the Fed’s more hawkish rhetoric. Following Powell’s comments, traders trimmed bets for a December rate cut, leading to a rebound in U.S. Treasury yields and reinforcing the dollar’s position as the top-performing major currency this week.
Attention now turns to upcoming U.S. manufacturing indicators, including the Final S&P Global PMI and the ISM Manufacturing PMI, both due later today. These figures will be critical in shaping market expectations for the Fed’s next moves. Strong readings could reinforce the case for higher-for-longer rates, potentially adding more downside pressure on the euro.
In addition, Fed officials Mary Daly and Lisa Cook are scheduled to speak later in the session, and investors will closely scrutinize their remarks for any shift in tone regarding inflation risks or policy flexibility. A reiteration of the Fed’s data-dependent approach could further cement the dollar’s dominance in the near term.
Technical Analysis 
From a technical perspective, EUR/USD remains deeply entrenched in a bearish trend. The pair continues to trade below the pivot resistance zone between 1.1558 and 1.1535, confirming persistent downside momentum. While the pair has briefly eased from oversold conditions on the relative strength index (RSI), the recovery attempts have been short-lived.
The next significant support lies at 1.1450, which represents a psychological threshold and a potential area for short-term profit-taking. A decisive break below this level could expose the pair to further declines toward 1.1373, extending the downtrend into the early part of November. Conversely, any sustained move above 1.1558 would be needed to signal a potential reversal or at least a period of consolidation.
TRADE RECOMMENDATION
SELL EURUSD
ENTRY PRICE: 1.15100
STOP LOSS: 1.15800
TAKE PROFIT: 1.1373
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