Euro sees fresh downside below 1.1050 against US Dollar, US PPI in focus

• Euro attracts some bids near 1.1047 against the US Dollar, outlook remains uncertain.
• TD Securities see the Fed hiking interest rates in all next three policy meetings.
• Investors await the US PPI data for October.

The Euro (EUR) finds a temporary support near 1.1047 against the US Dollar (USD) during the European trading session on Friday. The outlook of the major currency pair appears uncertain as the US Dollar outperforms due to expectations that the Federal Reserve (Fed) will deliver more interest rate hikes in the near term than what previously anticipated.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, clings to its 19-month high of 103.24 posted on Thursday.

TD Securities turn more hawkish on Fed path

According to strategists at TD Securities, the firm has shifted to a more hawkish stance on the near-term policy path, now expecting "25bp hikes in December, January, and March," rather than its earlier call for just December and March.

TD Securities flagged that the anticipation of more Fed rate hikes is backed by risk of price pressures remaining elevated. The firm also warned that the “Fed could hike more if inflation remains strong while the labor market accelerates." At the same time, TD Securities cautions that policymakers "could also halt tightening if uncertainty begins to weigh on the labor market or in the event equities begin a rapid sell-off."

Meanwhile, investors await the US Producer Price Index (PPI) data for October, which will be published at 13:30 GMT. On a monthly basis, the headline PPI is estimated to have grown at a moderate pace of 0.4% against 1.3% in September. The core PPI – which excludes volatile food and energy items – is also expected to risen moderately by 0.3% vs. the previous reading of 0.7%.

On the Euro front, investors await the revised Q3 Gross Domestic Product (GDP) estimate, which will be published at 10:00 GMT. The Q3 GDP growth is expected to have remained at 0.4%, the preliminary data showed.

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1064, keeping a bearish near-term bias as spot remains clearly below the 20-day exponential moving average (EMA) at 1.1170. The pair continues to grind lower after failing to reclaim that EMA, while the Relative Strength Index (RSI) at 35.7 stays below the midline but off oversold territory, hinting at persistent downside pressure with only limited signs of exhaustion.

On the topside, the 20-day EMA at 1.1170 is the first meaningful resistance, and a daily close above this barrier would be needed to ease the current bearish tone and open the door to a broader corrective recovery. With no nearby structural supports indicated in the dataset, traders will likely gauge downside risk by monitoring price behavior around the latest lows, as continued rejection below 1.1170 would reinforce the view that rallies remain vulnerable to selling.

(The technical analysis of this story was written with the help of an AI tool. Know more.)