The Euro (EUR) is trading fractionally lower against the US Dollar (USD), down 0.1%, but has stabilized just above Monday’s one-month low in the mid/lower-1.15s, according to Scotiabank strategists Shaun Osborne and Eric Theoret [1]. The pair is finding technical support near the 1.15 level, which is considered critical, especially as it aligns with the 50-day moving average at 1.1534. Resistance is identified above 1.16, specifically around the 200-day moving average at 1.1633 [1].
Fundamental factors remain supportive for the Euro, with steady yield spreads and hawkish rhetoric from European Central Bank (ECB) policymakers. A fair value estimate based on Germany-US 2-year yield spreads is currently at 1.1625 [1]. The options market is described as muted and trending toward neutral, reflecting a lack of strong directional conviction [1].
Recent economic data, specifically the ZEW investor sentiment survey, delivered mixed results: the expectations component was disappointing, while the current situation series showed an impressive surprise and meaningful recovery [1]. The near-term market focus is on broader themes and the upcoming Federal Reserve (Fed) meeting on Wednesday, which could impact overall sentiment [1].
Technically, the Euro’s pullback appears to have found near-term support, with the Relative Strength Index (RSI) in the low 40s—bearish but not oversold. A break below the 1.15 level would threaten the broader recovery trend that began in July [1].
CONCLUSION
The Euro is holding a critical support level near 1.15 against the US Dollar, supported by steady fundamentals and hawkish ECB rhetoric, despite mixed sentiment data. Market participants are awaiting the outcome of the upcoming Fed meeting, which could influence near-term direction. Technical and options market signals suggest a neutral to mildly bearish tone in the short term.