The euro has fallen to a 17-month low against the US dollar. EUR/USD touched 1.1161 on Oct. 5, its weakest level since May 2025.
The pair has lost more than 3% in five weeks and traded near 1.1182 on Monday. Analysts increasingly see the slide as a euro problem rather than a dollar story.
Why the Euro Keeps Losing to the Dollar
Four pressures are hitting the single currency at once.
According to KBC, euro weakness has taken over from dollar strength as the main driver. A hawkish Federal Reserve (Fed) started the drop in mid-September, but European problems carried it further.
France sits at the center. The gap between French and German 10-year yields has widened to levels last seen in the 2012 debt crisis, as investors doubt the 2027 budget.
The stress is also spreading. Italy plans a wider deficit, while Spain heads to a snap election on Nov. 29.
Meanwhile, the Fed raised rates in September and signaled another hike this year. Even a weak payrolls print of 29,000 jobs lifted the euro for only a day.
The European Central Bank (ECB) offers little help. It resumed hiking early, but officials have since played down an October move. At the same time, Brent crude above $100 lifts inflation while threatening growth.
“The euro hasn’t been able to get traction.”
Jane Foley, head of FX strategy at Rabobank, via Vantage
EUR/USD Charts Put 1.11 Support to the Test
On the weekly chart, the euro was rejected from the 1.18 resistance zone. It is now falling toward the 0.382 Fibonacci retracement at 1.1110, a former ceiling that turned into support in May 2025.
If that level breaks, 1.08 comes next. Below it sits the 0.618 golden pocket at 1.0509, with an ascending trendline from 2022 rising toward the area near 1.07.
The Relative Strength Index (RSI) stands at 34 and is still falling. However, it is nearing a support line that has held since 2022. A bounce from it could bring the euro back up against the dollar.
The daily chart tells a more bearish story. The pair has printed lower highs and lower lows since January inside a descending parallel channel.
The 20-day moving average has repeatedly rejected retests from below, each time leading to another lower high. It has not been tested since September and now sits near 1.13, at the channel’s midline. A first retest could end in rejection.
The channel’s lower band runs near 1.10, slightly below the 0.382 Fibonacci level. As long as the trend stays bearish, the euro could keep losing ground.
Banks remain split. MUFG sees 1.10 if French spreads keep widening, while ABN AMRO targets 1.15 by year-end. US inflation data on Oct. 14 and the Fed and ECB meetings on Oct. 28 and 29 could decide the next move.
