Introduction
Euro futures have broken below the support area that held through June and July, extending the decline from August’s highs. This was a very important level for Euro bulls to hold because the next support level is down at 1.11. The chart is oversold no won the daily so a short term bounce or consolidation period would be valid.
The euro has come under pressure against the US dollar amid stronger US yields, a more hawkish Federal Reserve outlook, and renewed demand for the US dollar. Higher Treasury yields make dollar-denominated assets more attractive, while the US economy has continued to show greater strength than the eurozone. At the same time, Europe is facing additional pressure from elevated energy prices, which can hurt growth, raise business costs, and weaken the region’s trade position.
This creates a difficulty for the euro futures to rally. While the ECB has also maintained a restrictive stance, markets are currently more focused on the stronger US growth and yield advantage. For 6E traders, the main drivers to watch are US inflation and labour data, Treasury yields, eurozone inflation, and energy prices. A continued rise in US yields or further weakness in European growth could keep pressure on the euro, while softer US data or easing energy costs could help support a recovery.
Daily Chart
The August rally stalled around 1.1750, near the 200 moving average, before price began making lower highs and lower lows. September’s selling then took 6E below the 50 moving average and through the summer support zone.
For buyers, a daily close above 1.1435, followed by a successful retest, would suggest the breakdown is failing. That could open a recovery toward 1.1500, with the orange moving average near 1.1577 further above.
Key Levels To Mark On The Chart
| Level | Importance |
|---|---|
| 1.1723–1.1750 | 50 moving average and August swing-high area |
| 1.1577 | 200 moving average |
| 1.1500 | First recovery target after a support reclaim |
| 1.1400–1.1435 | Broken support; potential resistance |
| 1.1350 | Recent swing-low area |
| 1.1300 | Psychological downside reference |
Possible Trades
Retest short: Watch for a rejection of 1.1400–1.1435 and an hourly lower high. Place the stop above the rejection high, with targets around 1.1350 and 1.1300.
Recovery long: Wait for a daily close above 1.1435 and a retest that holds. The stop goes below the retest low, with targets around 1.1500 and 1.1575. This remains a countertrend setup.
Selling after the decline leaves less room before the recent low. A failed retest of resistance would offer a clearer place to define risk.
This analysis is for educational and informational purposes only and does not constitute trading advice or a recommendation to buy or sell any futures contracts. Futures trading involves significant risk and may not be suitable for all investors. Always conduct your own research and consult with a licensed financial professional before making trading decisions.
