EUR/USD Extends Decline to One-Month Low, Signals Continued Weakness

EUR/USD extended its decline in early Monday trading, falling about 0.5% as the US dollar strengthened on mounting expectations of another Federal Reserve rate hike. Additional support for the greenback came from a risk-off market mood after fresh warnings over the pace of artificial intelligence development sparked a selloff in AI-related stocks and boosted demand for safe-haven assets.

The pair slid to a one-month low at 1.1534, with the latest downside acceleration deteriorating the daily chart structure and increasing the risk of a deeper pullback.

A decisive break below support at 1.1563/55, which marks the 38.2% Fibonacci retracement of the 1.1324/1.1711 rally and the 100-day moving average, generated a fresh bearish signal. The move also reinforced last week’s bull trap above the 200-day moving average and confirmed a bearish failure swing pattern.

Negative momentum continues to build, while the upcoming daily cloud twist adds to the bearish outlook and points to the potential for further weakness.

The next downside target stands at 1.1517, the 50% Fibonacci retracement level, reinforced by the 55-day moving average. Below that, attention turns to the thinning daily cloud zone between 1.1505 and 1.1472, with the latter coinciding with the 61.8% Fibonacci retracement.

Any recovery attempts are expected to remain capped under the broken support area around 1.1560, now acting as strong resistance and keeping near-term bears firmly in control.

Res: 1.1563; 1.1600; 1.1620; 1.1630
Sup: 1.1517; 1.1505; 1.1472; 1.1415