EUR/USD slips to $1.15 as Fed repricing deepens and dollar hits five-month high

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EUR/USD Fed repricing deepens

Highlights

- EUR/USD hovers near $1.15 after a fifth consecutive daily decline.

- FedWatch now places December cut odds below 33 percent.

- Pair tests the $1.152–$1.143 Fibonacci zone as downside pressure builds.

Traders scaled back euro exposure after the latest FOMC minutes showed increased pushback against early easing. With NFP and Eurozone/U.S. flash PMIs approaching, markets are preparing for confirmation of the dollar’s renewed strength.

Fed tone triggers repricing as EUR/USD approaches structural support

The FOMC minutes revealed that several policymakers are unwilling to cut rates in December, warning that easing too soon risks reversing disinflation progress. This stance pushed December cut expectations below 33 percent and strengthened demand for the dollar.

The DXY’s advance has pressured EUR/USD consistently. Repeated failures at the top of the descending channel have left the pair vulnerable, with macro divergence between U.S. resilience and Eurozone softness widening the gap. European sentiment remains cautious heading into Friday’s flash PMIs, with investors watching whether manufacturing and services can avoid deeper contraction.

Technical structure weakens as EUR/USD tests the $1.152–$1.143 zone

Technically, EUR/USD remains under significant pressure. The pair has slipped below the 20-day EMA at $1.157 and the 50-day EMA at $1.161, both now sloping lower. Price is pressing into the key Fibonacci cluster between $1.152 and $1.143, which acted as a structural floor in July and August.

EUR/USD price dynamics (Source: TradingView)

The descending channel guiding lower highs since September remains intact, with last week’s rejection near $1.17 confirming resistance. Today’s test of $1.15 marks a direct retest of the summer demand block.

The 200-day EMA sits lower at $1.141, the next major reference if selling accelerates. A decisive break would carry broader implications into December.

RSI near 39 signals ongoing bearish momentum without signs of capitulation. A dip into the low 30s would align with a deeper test toward $1.145, while only a move above 50 would indicate buyers attempting to regain control.

Macro catalysts reinforce downside bias ahead of NFP and PMI data

Dollar strength continues to dominate market direction. With U.S. data outperforming Eurozone metrics, traders expect the Fed to hold its stance longer. NFP will determine whether the labor market can justify pushing rate cuts into 2025.

A strong NFP print increases the likelihood of a clean break below $1.15, exposing $1.145 and possibly $1.142. A weaker print may spark a rebound toward the 20-day EMA, though any recovery remains suspect without a broader structural shift.

Eurozone PMIs remain a key variable. Another soft reading in manufacturing or services would reinforce euro weakness and validate the recent technical breakdown.

To shift momentum, bulls need a daily close above $1.158 and eventually a break above the channel top near $1.169. Until then, rallies are expected to face selling pressure.

In earlier EUR/USD coverage, we highlighted that repeated failures at the channel’s upper boundary made a deeper move toward the $1.152–$1.143 zone likely once the 20-day EMA broke. Today’s decline confirms that view, with price now sitting inside the exact band flagged previously.

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