Euro's modest rise faces limits from France's debt concerns as USD selling continues unabated

Fresh buying supports EUR/USD on Friday, with the USD still subdued near a multi-week low.
The USD faces pressure from the recent decline in US bond yields and expectations that the Fed will leave rates unchanged.
Further USD weakness could be checked by geopolitical risks, while France’s debt crisis could restrict the Euro’s upside.

Buying interest in EUR/USD carries into Friday’s Asian session, extending the overnight recovery from below 1.1200. Mixed fundamental signals nevertheless keep spot prices within the range established over the past week, with the pair currently trading near 1.1225.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Support for EUR/USD comes largely from a subdued US Dollar (USD), which remains close to the three-week low reached on Thursday. Investors have been shifting from Artificial Intelligence (AI) and technology stocks towards safe-haven government bonds, sending the benchmark US Treasury yield below 5% to its lowest level in over a month. Recent comments from US Federal Reserve (Fed) officials, indicating no urgency to increase interest rates, have also kept the Dollar under pressure.

However, US inflation data published last week reinforced market expectations of an imminent Fed rate increase. Traders assign around an 80% probability to a December rise in borrowing costs by the US central bank, according to CME Group's FedWatch Tool. Inflation concerns arising from volatile oil prices also support the prospect of further Fed tightening. Together with tensions in the Middle East, these factors could cushion the safe-haven Greenback against additional losses.

Geopolitical risk remains firmly priced in following the latest statement from Iran’s Islamic Revolutionary Guard Corps (IRGC). It said further US attacks could lead Tehran to invade neighbouring countries and strike bases used for US military operations under its new offensive strategy. The statement follows a report that the US and Israel have prepared detailed plans for fresh strikes on Iran. These developments might discourage USD bears from taking new positions.

The Euro could also remain under pressure from France’s deep sovereign debt and political crisis, restricting gains in EUR/USD. For the next meaningful trigger, traders await flash PMIs from the Eurozone and the US. Attention will chiefly centre on the outcome of the two-day FOMC meeting beginning next Tuesday, alongside key US economic releases: the Advance Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index.

What does the EUR/USD daily chart indicate?

Technical Analysis: Can EUR/USD Overcome Nearby Resistance?

A bearish near-term outlook persists for EUR/USD while it trades below both the 50-day Simple Moving Average (SMA) at 1.1437 and every key Fibonacci retracement of the 1.1116–1.1710 advance. The first resistance lies at 1.1256, the 23.6% Fibonacci retracement. Beyond that, resistance levels are closely grouped between the 38.2% retracement at 1.1343 and the 50.0% retracement at 1.1413, with the 50-day SMA at 1.1437 adding to the barrier.

Above this zone, the 61.8% retracement at 1.1483 and the 78.6% level at 1.1583 stand ahead of the cycle peak of 1.1710. If EUR/USD resumes its decline, the Fibonacci anchor at 1.1116 offers the only nearby structural support, where buyers could try to arrest the fall.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

How Has the US Dollar Performed Over the Last 7 Days?

The US Dollar recorded its strongest performance against the Euro over the last 7 days. The table below sets out the percentage changes in the US Dollar (USD) against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.02%	-0.96%	-1.06%	-1.32%	-1.43%	-1.21%	-0.83%
EUR	0.02%		-0.95%	-1.04%	-1.33%	-1.46%	-1.26%	-0.82%
GBP	0.96%	0.95%		-0.10%	-0.35%	-0.54%	-0.28%	0.16%
JPY	1.06%	1.04%	0.10%		-0.30%	-0.39%	-0.22%	0.21%
CAD	1.32%	1.33%	0.35%	0.30%		-0.09%	0.09%	0.49%
AUD	1.43%	1.46%	0.54%	0.39%	0.09%		0.28%	0.63%
NZD	1.21%	1.26%	0.28%	0.22%	-0.09%	-0.28%		0.44%
CHF	0.83%	0.82%	-0.16%	-0.21%	-0.49%	-0.63%	-0.44%

Percentage movements between major currencies are displayed in the heat map. Select the base currency from the left-hand column and the quote currency from the top row. For instance, choosing the US Dollar on the left and following that row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.