The Euro (EUR) may test the 1.1580 mark, but it is unlikely to drop significantly below this level for an extended period. Analysts at UOB Group predict that the Euro will generally trend downwards in the long run and may revisit the 1.1540 level. Recently, the Euro fell to 1.1597, which was unexpected given earlier forecasts that it wouldn’t fall much below 1.1625. Today, it might test the 1.1580 level again, but a significant drop beyond this seems improbable. Resistance levels are identified at 1.1620 and 1.1640.

Euro Short Term Outlook

In the next one to three weeks, predictions initially indicated that the Euro would move between 1.1580 and 1.1690. However, it unexpectedly dropped to 1.1597 in the late New York session. The expectation is for the Euro to continue declining, possibly retesting last week’s low of 1.1540, as long as it stays below the 1.1660 resistance level. With increasing downward pressure, the EUR/USD pair is expected to trend downwards in the coming weeks, potentially revisiting the 1.1540 support level. This outlook remains valid as long as the price stays below the strong resistance at 1.1660. This bearish outlook is backed by recent economic data. Eurostat’s flash estimate for September 2025 indicated that Eurozone inflation unexpectedly fell to 1.9%, while the latest US CPI data remained high at 3.5%. This creates a contrast between a dovish European Central Bank and a hawkish Federal Reserve.

Trading Strategies

This situation is similar to what happened in 2022, when aggressive Fed rate hikes strengthened the dollar against the Euro. Recent comments from Fed officials suggest a “higher for longer” approach to tackle inflation, indicating a potential repeat of this trend, although less extreme. Thus, the easiest path for the EUR/USD looks to be downward. For traders, this means considering positions for further declines using options. Buying put options with a strike price at or below 1.1580 could effectively capitalize on a move towards 1.1540. This approach allows for a clear risk, limited to the premium paid for the option. Alternatively, a bear put spread might be a good option to reduce initial costs. This involves buying a put option, for example at 1.1580, and selling another put at a lower strike, like 1.1540. It’s important to watch the 1.1660 resistance level, as a breakthrough would invalidate this bearish approach. Create your live VT Markets account and start trading now.

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