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 the U.S. currency market yesterday, the U.S. dollar rose against the euro. The EUR/USD pair fell from 1.1730 to 1.1653, encountering 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 euro/pound 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 watching to see if ECB President Lagarde’s remarks during today’s U.S. trading session bring any changes to 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 21:30: Canada’s International Merchandise Trade, at 23:00: Canada’s Ivey Purchasing Managers’ Index, remarks by U.S. Atlanta Fed President Bostic, at 23:05: remarks by U.S. Fed Chair Bowman, at 23:45: remarks by U.S.Remarks by Fed Vice Chair Milan, at 24:30: Remarks by Kashkari, President of the Federal Reserve Bank of Minneapolis, at 25:00: Remarks by Nagel, President of the German Central Bank, and at 25:10: Remarks by Lagarde, President of the ECB.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.