Concerns Over Further Downside Potential for the Euro, Which Has Weakened Following Japan's Lead?

Concerns Over Further Downside Potential for the Euro, Which Has Weakened Following Japan's Lead?

07.10.2025

In yesterday’s U.S. currency trading, the U.S. dollar rose against the euro. The EUR/USD pair fell from 1.1730 to 1.1653, declining as it encountered resistance at the 200-period SMA on the hourly chart.On the 4-hour chart, the price has broken below the 200 SMA—which had been acting as support—with a real-body candle, and on the daily chart, it is forming lower highs along the 20 MA. Furthermore, during today’s Asian trading session, the price is trending lower on the hourly chart while being capped by the 200 SMA.

Among European currencies, the euro fell against the pound. The EUR/GBP pair dropped from 0.8728 to 0.8652. The price declined along the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the price has fallen to just below the 200-period simple moving average (SMA), and on the daily chart, the price has broken below the 20-period MA—which had previously served as support—with a real body candle.We will be closely monitoring whether ECB President Lagarde’s remarks during today’s U.S. trading session will bring about any changes in the euro.

Today’s economic indicators include the Australian Westpac Consumer Confidence Index at 8:30, Japan’s All-Household Household Expenditure Survey at 8:30, Japan’s Economic Sentiment Index at 14:00, Germany’s New Manufacturing Orders and the UK’s Halifax House Price Index at 15:00, and at 15:45, France’strade balance and current account balance at 15:45, Canada’s international merchandise trade at 21:30, Canada’s Ivey Purchasing Managers’ Index at 23:00, remarks by U.S. Atlanta Fed President Bostic at 23:00, remarks by U.S. Fed Chair Bowman at 23:05, remarks by U.S.Remarks by Fed Vice Chair Milan, at 24:30: Remarks by Kashkari, President of the Minneapolis Fed, at 25:00: Remarks by Nagel, President of the German Central Bank, and at 25:10: Remarks by Lagarde, ECB President.Note that the release of the U.S. trade balance has been postponed due to the U.S. government shutdown. Investors should remain cautious about the downside potential for the euro, which has weakened following the Japanese yen.