EUR/USD fell for a second day and was down 0.38% at 1.1567 after failing to break the 200-day simple moving average (SMA) near 1.1672. The move followed broad US Dollar strength, helped by expectations of no near-term Federal Reserve rate cut and higher US Treasury yields.
The pair has moved sideways after peaking near 1.2082 on 27 January, then pulling back towards 1.1700. It then formed lower highs and lower lows, reached 1.1507, and rebounded to the current level.
EUR/USD is now trading below the 200-day SMA at 1.1672, after moving above it on 3 March. A drop below 1.1500 may open support at the 5 November 2025 daily low of 1.1468, then 1.1450, and next 1.1391 from 1 August 2025.
On the upside, price may need to regain 1.1600 to retest 1.1672. If it moves above both levels, resistance is seen at 1.1700.
Given the EUR/USD has fallen below its 200-day moving average, we see a bearish outlook for the coming weeks. The failure to hold above 1.1672 suggests weakening momentum, a view supported by recent data showing US 10-year Treasury yields firming around 4.6% and a slightly hotter-than-expected US CPI reading last week. This reinforces the idea that the Federal Reserve will not be in a rush to cut interest rates.
For derivative traders, this environment favors strategies that profit from a decline or stagnation in the euro. We believe buying put options with strike prices at or below the key 1.1500 psychological level is a direct way to position for further downside. Expiration dates in late April or May 2026 would provide enough time for the pair to test the lower support targets mentioned.
Another approach is to establish bear call spreads to capitalize on the strong resistance overhead. By selling a call option with a strike price near 1.1650 and buying a protective call at 1.1700, we can generate income if the EUR/USD stays below our sold strike. This strategy has a defined risk and benefits from time decay as long as the pair remains capped by the 200-day average.
Looking back at the price action in 2025, we recall that a sustained break of the 200-day average often preceded a multi-week trend. The lows from November 2025 at 1.1468 and August 2025 at 1.1391 are not just lines on a chart; they are significant levels that could be revisited if the 1.1500 floor gives way. Traders should therefore watch this 1.1500 level closely as a trigger for a potential second leg down.
However, we must manage the risk that this bearish view is wrong. Any strong daily close back above the 1.1600 handle would be the first sign of a bullish reversal, signaling that bearish positions should be reduced or closed. If the pair were to reclaim the 200-day SMA at 1.1672, it would invalidate our current bearish thesis entirely.
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