The euro remains under sustained selling pressure, with EUR/USD slipping to a three-week low below 1.1600 in early European trading on Wednesday. Despite a modest rebound on Tuesday, the technical backdrop points to a clear buildup of bearish momentum.
Political risks in focus
The ongoing clash between US President Donald Trump and the Federal Reserve briefly capped dollar strength earlier this week, allowing the euro to stabilize. However, renewed political turmoil in France has quickly reversed that trend.
French Prime Minister François Bayrou is widely expected to lose his September confidence vote after failing to secure consensus on a debt-reduction and austerity plan. A loss could leave President Emmanuel Macron with two options: appoint a new prime minister—potentially from the center-left—or call a snap election.
Analysts at ABN Amro caution that an election scenario could trigger broader instability across the Eurozone. “If President Macron appoints a new Prime Minister—likely from the centre-left this time—instead of calling for new legislative elections, we do not anticipate a further widening of the 10-year spread,” they noted.
Data calendar offers little support
With no major US data releases scheduled for the second half of the trading day, the market is unlikely to find catalysts for a meaningful euro recovery. Investors may therefore remain hesitant to add fresh long positions.
Technical outlook
Momentum indicators reinforce the bearish view. The Relative Strength Index (RSI) on the 4-hour chart has slipped below 40, while EUR/USD has closed three consecutive 4-hour sessions under the 200-period Simple Moving Average (SMA)—both signals of sustained downside pressure.
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Support levels: 1.1540 (static), 1.1500 (psychological), 1.1450 (static)
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Resistance levels: 1.1600 (static), 1.1640–1.1650 (100- and 200-period SMA cluster), 1.1700 (static, psychological)
Overall, the technical picture suggests that unless EUR/USD reclaims the 1.1600 handle decisively, the path of least resistance remains lower.
