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06.11.2026 06:47 PM
EUR/USD – Smart Money Analysis: The Euro Remains Under Pressure

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At the end of last week, the EUR/USD pair swept liquidity below the previous low, which signaled the possibility of an upward move. This week, however, the pair swept liquidity above the previous high, signaling another potential decline. Thus, the technical picture initially provided the euro with an opportunity to recover slightly before triggering another substantial decline. Buyers once again failed to take advantage of the available fundamental support and could not even reach the nearest imbalance, which would have provided an opportunity not only to anticipate another decline in the euro but also to open new short positions. However, buyers have rarely been this weak. Today, just two US economic reports were enough to trigger an 80-point decline in the European currency. These reports were undoubtedly important, and their results were highly favorable for the dollar. The US economy added as many as 165,000 new jobs according to the Nonfarm Payrolls report, while the unemployment rate fell to 4.1%. In both cases, the results were significantly better than traders had expected.

Over the past two months, the fundamental background has frequently favored the European currency, but this has had virtually no impact on the price charts. This week, it became known that the Republican Party suffered a significant defeat in the elections, while inflation in the European Union accelerated to 4%. The US Congress will now be divided, and cooperation between Democrats and Republicans is likely to remain difficult. As a result, many important government decisions could face considerable delays. Higher inflation in the European Union points to further monetary policy tightening by the ECB, which is also a bullish factor. If the market is pricing in an FOMC rate hike, it should also be taking potential ECB rate hikes into account. Both of these factors favor the euro, yet neither has triggered a significant recovery.

It is worth recalling that one of the main reasons behind the dollar's appreciation over the past two months has been the Fed's hawkish stance. However, in practice, its position is not particularly hawkish compared with those of other central banks. For example, the ECB is expected to implement its third rate hike in December, while the Bank of England has only recently begun its monetary policy tightening cycle and could eventually raise interest rates more aggressively than the Fed. The pound is responding to monetary policy developments, whereas the euro is not.

At present, there are no clear signs that the bearish advance is coming to an end. Imbalance 24 remains valid, and the price could still react to this zone, potentially generating a sell signal. Buyers need to invalidate Imbalance 24 and form bullish patterns before any meaningful recovery can be expected. This would require a sharp upward move in the euro, which is still not evident.

Overall, the fundamental background continues to favor buyers, in the opinion of this analysis. Despite the Fed's increasingly hawkish monetary policy stance, it is not the only factor determining exchange rates. The European Union also faces economic challenges, but the key point is that problems exist across multiple economies, while the euro is the currency experiencing the most pronounced weakness. Both central banks are pursuing monetary policy tightening, yet only the dollar is appreciating. Nevertheless, a recovery in the euro should not be expected until bullish signals emerge. Opening long positions in the European currency in advance is also not advisable.

The current technical picture indicates that bearish momentum remains intact. Imbalance 24 is the only relevant technical pattern at present and could be tested in the near term. The liquidity sweep above 1.1270, combined with strong US labor market data, triggered further selling pressure on the euro. Buyers can now only look for another liquidity sweep below the recent lows.

Friday's economic data provided sellers with another opportunity to increase pressure on the euro, and they took full advantage of it. Nonfarm Payrolls exceeded market expectations, while the unemployment rate declined, contrary to forecasts. The remaining economic indicators are less relevant, as these two reports largely determined market sentiment at the end of the week.

Buyers still have numerous reasons to consider further gains in 2026. From a structural and broader perspective, Trump's policies, which contributed to the significant depreciation of the dollar last year, have not fundamentally changed. At present, there are no convincing factors providing substantial support for the US currency, despite the FOMC's hawkish stance. However, market sentiment does not change easily or quickly.

Economic Calendar for the US and the European Union:

  • Germany – Trade Balance (07:00 UTC).

On November 9, the economic calendar contains only one event, which is unlikely to attract significant market attention. The economic news background is therefore unlikely to influence market sentiment on Monday.

EUR/USD Forecast and Trading Recommendations:

In this analysis, the pair is still considered to be in the process of forming a bullish trend that has entered a corrective phase lasting an entire year. The fundamental background shifted sharply in favor of sellers eight months ago, but the broader trend, which has been developing for four years, cannot yet be considered invalidated or complete. Buyers could resume their advance before the end of the year, but their current technical opportunities are limited to the low of 1.1066 established in June last year and the low of 1.1105 established two weeks ago. As for sellers, following Friday's sharp decline in the euro, they may now look for a new bearish imbalance to form. However, the current sideways movement also needs to come to an end. Otherwise, the price could once again sweep liquidity below the recent low and quickly return to Imbalance 24.

Samir Klishi,
Analytical expert of InstaTrade
© 2007-2026

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