EUR/USD Extends Losing Streak on Tightening Expectations, Volatility Ahead

The EUR/USD exchange rate has extended its weekly losing streak to three weeks, falling back towards the 1.1360 level for the first time since late July.

This decline is largely due to the strengthening US Dollar, which has gained nearly 4 cents from its August peak near 1.1700.

Market expectations of further Federal Reserve tightening and higher energy costs in the Eurozone have contributed to this trend, with investors positioning themselves for potential ECB action.

CFTC data shows that euro net shorts have been cut to nearly 27K contracts, while speculative exposure has improved to -2.93%, indicating less negative positioning but still historically bearish conditions.

With the ECB's October 29 decision looming and key economic releases ahead, market volatility is expected to increase in the coming weeks.