**EUR/USD Trends** The EUR/USD pair is struggling, currently trading below 1.1560 and hitting a two-month low of 1.1542. Market sentiment is cautious as US-China trade tensions escalate with both countries raising fees on each other’s ships. Attention is on Federal Reserve Chairman Jerome Powell’s upcoming speech. With no major data available, markets anticipate two interest rate cuts from the Fed in the near future. The Euro faces continuous pressure, with indicators pointing to bearish trends. German ZEW Economic Sentiment for October has climbed to 39.3 from 37.3, but it still falls short of what analysts expected. The Current Situation Index dropped to -80.0 from -76.4, defying expectations for improvement. Additionally, German inflation rose to 2.4% year-on-year in September. The Eurozone Economic Sentiment Index declined to 22.7 from 26.1, contrary to predictions of a rise. Trade tensions are intensifying as China restricts rare earth exports, and the US plans to impose higher tariffs on Chinese goods starting November 1. **Impact of Market Dynamics** The US Dollar might react to Powell’s comments, although no significant data is expected. Support for EUR/USD stands at 1.1542, while resistance and support levels suggest a cautious outlook for the pair. As of October 14, 2025, the EUR/USD pair remains under considerable pressure. Renewed US-China trade conflicts are shifting investments towards the US Dollar, keeping the Euro below the important 1.1600 level. This risk-averse sentiment dominates the market, with any minor Euro rallies facing selling pressure. Economic weakness in Europe, especially in Germany, heavily impacts the Euro. The recent ZEW economic sentiment data was disappointing, following September’s report showing a 0.6% contraction in German industrial production—reminiscent of economic issues faced in 2022-2023. With inflation in Germany rising to 2.4%, the European Central Bank finds itself in a tough spot, unable to stimulate the economy without driving prices higher. All eyes are on Powell’s forthcoming speech, with markets anticipating two more interest rate cuts by year’s end. This expectation stems from recent US job growth slowdown, with the last Non-Farm Payrolls report revealing a weaker-than-expected addition of 160,000 jobs. Despite the potential for lower US rates, the dollar remains strong due to a rapidly worsening economic outlook in Europe. For derivative traders, this situation may lead to increased volatility in the coming weeks. The VIX, a measure of market fear, has risen from recent lows to above 18, suggesting that investors are seeking protection against unexpected fluctuations. Traders might consider options strategies like straddles or strangles if they expect significant movement after Powell’s remarks but are uncertain of the direction. Given the bearish momentum, selling futures contracts during rallies towards the 1.1600 resistance level could be effective. Alternatively, purchasing put options with strike prices below 1.1550 would allow downside exposure while limiting risk to the premium paid, enabling traders to benefit from a continued decline in the EUR/USD pair. **Trading Strategies** It’s crucial to closely monitor the immediate support level at 1.1542. A break below this level could intensify the decline, with the next bearish targets at 1.1530 and then at the descending channel base around 1.1525. Failing to breach these levels may indicate a temporary halt in the downward trend, presenting an opportunity to reassess positions. Create your live VT Markets account and start trading now.

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