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EuroMarketsTechnical Analysis

EUR/USD Price Forecast: Trades below 1.1400, near two-month low ahead of Trump-Xi summit

  • EUR/USD stabilizes after touching a nearly two-month low during the Asian session.
  • The USD pauses for a breather ahead of the Trump-Xi summit, supporting spot prices.
  • The bearish technical setup suggests that the path of least resistance is to the downside.

The EUR/USD pair drifts lower for the third straight day, hitting a fresh low since July 28 during the Asian session on Thursday, though it lacks follow-through. Spot prices currently trade around the 1.1380-1.1375 region, nearly unchanged for the day, as bears turn cautious ahead of a crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping.

Meanwhile, the US Dollar (USD) pauses for a breather following the previous day’s strong move up to a nearly two-month high and lends some support to the EUR/USD pair. However, rising US Federal Reserve (Fed) rate hike bets, along with geopolitical uncertainties, favor USD bulls. The shared currency, on the other hand, is undermined by political instability in Germany, which, in turn, suggests that the path of least resistance for the currency pair remains to the downside.

The daily Relative Strength Index (14) has fallen to 25.47, signaling oversold conditions that could slow further downside but do not yet suggest a durable bottom for the EUR/USD pair. Moreover, the Moving Average Convergence Divergence (MACD) sits below zero with a negative reading near -0.0025, hinting at persistent bearish momentum despite some risk of short-term corrective rebounds, which run the risk of fizzling out rather quickly near the 1.1420 supply zone.

On the downside, the one-year low, around 1.1325, touched in June, could offer some support ahead of the 1.1300 mark, below which the EUR/USD pair could fall to the 61.8% Fibonacci expansion at 1.1244. Meanwhile, the oversold RSI reading and the negative MACD configuration could act as momentum-based supports rather than precise price floors. Moreover, traders would likely treat any recovery toward 1.1425 as an opportunity to reassess the strength of the broader downtrend.

EUR/USD daily chart

Chart Analysis EUR/USD
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