Should we be wary of further downside potential for the euro against the U.S. dollar?

Should we be wary of further downside potential for the euro against the U.S. dollar?

21.10.2025

In yesterday’s U.S. currency trading, the Canadian dollar rose against the yen after Canada’s September industrial production, released yesterday, improved to +1.7% from -0.6% the previous month. The CAD/JPY pair rose from 107.076 to 107.914, moving above the 20-period moving average on the hourly chart.On the 4-hour chart, the 200-period simple moving average (SMA) is acting as a support level, and a reversal appears to be underway. On the daily chart, the pair is currently attempting to break above the resistance line formed by the 20-period moving average (MA).

European currencies fell against the U.S. dollar despite the fact that Germany’s September Producer Price Index (PPI), released yesterday, improved year-over-year from a 2.2% decline in the previous month to a 1.7% decline.The EUR/USD pair fell from 1.1675 to 1.1638. A downtrend has emerged along the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the pair has pulled back as resistance from the 200-period simple moving average (SMA) has capped its upside, and on the daily chart, a downtrend is beginning to form along the 20-period MA.

Today’s economic calendar includes the Swiss trade balance at 3:00 PM, Japanese machine tool orders at 3:00 PM, remarks by ECB President Lagarde at 8:00 PM, the Canadian Consumer Price Index at 9:30 PM, remarks by Fed Governor Waller at 10:00 PM, and remarks by Bundesbank President Nagel at 7:00 AM the following day. No other major speeches or key economic indicators are scheduled.We should remain highly vigilant regarding the downside potential for the euro, which has fallen against the U.S. dollar.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed