EUR/USD experienced slight declines around 1.1565 in early European trading on Monday. The bearish outlook continues as the pair remains under the 100-day EMA, with the RSI suggesting more potential declines. The first resistance level is at 1.1575, while initial support lies at 1.1468. On Wednesday, EUR/USD showed minor losses near 1.1565. The US dollar strengthened against the euro amid expectations that the US government shutdown might soon end. We await more information from the Eurozone Sentix Investor Confidence report set for release later this week.

Potential Technical Move

A break above the 100-day EMA at 1.1575 could spark bullish momentum toward 1.1668. On the downside, we could see the pair drop to 1.1403, with additional support at 1.1364. The Euro, which is used by 20 EU nations, accounted for 31% of global foreign exchange transactions in 2022. The European Central Bank (ECB) oversees monetary policy in the Eurozone, adjusting interest rates to ensure price stability. Eurozone inflation data is crucial; higher-than-expected inflation could prompt the ECB to adjust rates. Several economic indicators, like GDP and trade balance, influence the Euro’s value. A strong economy or a favorable trade balance typically helps boost the currency. We observe a bearish technical setup reminiscent of past market cycles, especially the late 2010s when the pair traded around 1.15. As of November 10, 2025, EUR/USD is much lower at about 1.0720, indicating a significant long-term shift. This ongoing downtrend places pressure on short-term rallies.

Options Strategies

The pair is currently below its 50-day moving average of 1.0780, and the Relative Strength Index (RSI) is weak at 42. This technical landscape shows that sellers remain dominant, and any move toward the moving average may face resistance. The past analyses suggest that as long as we stay below key technical levels, the easiest path is downward. Given this bearish outlook, traders might consider buying out-of-the-money put options with December expirations. A strike price around 1.0600 could allow for profit if the pair slides back to earlier lows this year. This strategy limits risk to the premium paid while allowing for substantial gains if the dollar continues to strengthen. Recent fundamental data supports this outlook, with the US Non-Farm Payrolls report on November 7 revealing a stronger-than-expected addition of 210,000 jobs. This sharply contrasts with Eurozone reports showing a 0.8% drop in German industrial production in October, raising concerns of economic stagnation. The differing policy approaches of a data-driven Federal Reserve and a more cautious ECB continue to favor the dollar. For those expecting a slower decline rather than a sharp drop, a bear put spread might be a better option. By buying a higher-priced put and selling a lower-priced one, traders can lower the initial cost of their position. This strategy suits those predicting a drift toward the 1.0650 support level in the coming weeks. Implied volatility in one-month EUR/USD options stands at 7.5%, which is elevated compared to summer lows but not extreme. This moderate volatility makes option selling strategies, like writing covered calls against an existing long position, an attractive way to generate income. It also suggests that option premiums for directional bets are not overly expensive right now. Create your live VT Markets account and start trading now.

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