EUR/USD has failed to find sustained support above 1.17 this week, pressured by a firm US dollar, disappointing US manufacturing figures, and a market shift toward defensive positioning that favored dollar assets.
The pair moved toward a near four-week low of around 1.1670 on Monday before response buying allowed modest recovery above the psychologically important 1.17 level. Early trading was dominated by safe-haven bids in USD, reflecting broader risk aversion in equity and commodity markets alike.
Forex strategists highlighted that the domestic euro area data flow has been lackluster, leaving the euro vulnerable to yield spreads and speculative dollar demand. Such dynamics have clouded the outlook for EUR/USD in the immediate term.
The soft US ISM reading released Monday, which missed consensus forecasts, contributed to euro retracement as traders initially reacted by reducing bearish positions, but the broader dollar rally limited euro upside.
Interbank data showed rising short interest around EUR/USD last session, a signal that institutional desks were stacking dollar bets ahead of key US macroeconomic catalysts later this week.
Technical analysis reinforced the bearish narrative, with the currency pair trading below several key moving averages and lacking upward momentum markers. Should current support areas give way, analysts warn of accelerated declines.
Looking forward, market focus remains fixed on the Federal Reserve minutes and forthcoming US employment data, which are expected to shape near-term positioning and potentially amplify directional conviction in EUR/USD trading.
You Might Be Interested In:
