EUR/USD Plummets to 10-Week Low Amid US Dollar Strength
The EUR/USD has fallen to a 10-week low due to a strengthening US dollar and despite strong economic growth in the Eurozone. The region's PMI data showed business activity grew at a faster pace in September, with the service sector PMI rising to 53.0, manufacturing remaining unchanged at 52.7, and the composite PMI hitting a 41-month high of 53.1.
However, the euro is under pressure due to the growing divide between the Federal Reserve and the European Central Bank (ECB). The Fed hiked interest rates by 25 basis points last week and signaled another rate hike could come before the end of the year, supporting the greenback. In contrast, the ECB faces a difficult balancing act in keeping inflation under control while avoiding unnecessary pressure on the fragile economy.
The EUR/USD technical analysis suggests a bearish picture, with the price breaking down below its rising channel and trading below its 50 and 200 EMAs. Sellers are targeting 1.1350, the July 27 low, while any recovery would need to rise above 1.1500.