EUR/USD Sinks Through July Lows Even as Eurozone Activity Rebounds

The Technical Breakdown: Double Top Confirmed

EUR/USD sliced through the 1.1380 floor late in the week, a level that had held as the July low after ING's bearish forecast precisely targeted it. The break confirmed a double-top pattern that had been building since mid-month, with the neckline right at that 1.1380 zone. A clean close below opens the door to measured-move targets near 1.1210, and orbex.com's chart work points to 1.1065 as the next downside magnet. The daily resistance now sits firmly at 1.1480; until buyers reclaim that, the path of least resistance points south. The speed of the drop was telling: three straight declines earlier in the week gave way to only a modest Friday bounce, as oil's 4% plunge pulled some heat from the dollar. But that pullback did little to repair the technical damage.

Fundamental Divergence: Why Good Data Didn't Help

Friday brought a genuine upside surprise: the eurozone composite PMI rose to 51.9, beating the 50.3 consensus and marking the first expansion in four months. Services jumped to 51.6 from 49.4, and manufacturing ticked up to 52.0, according to Forexlive. In a vacuum, that should have supported the euro. Instead, the single currency weakened. The reason is a textbook case of macro divergence. The US Dollar Index has been riding a bull flag breakout since June's FOMC meeting, and higher energy prices had been fanning the safe-haven bid, according to reports from forex.com and others. The ECB may be hawkish, as OCBC notes, but the rate support that briefly propped up EUR/USD is fading, MUFG warns. Traders are pricing in a Fed that stays restrictive for longer, and the eurozone's bright spot simply wasn't enough to shift that calculus.

What TradeVisor's AI Is Tracking

TradeVisor's models are not just reacting to the price break; they're measuring the drivers. The platform's AI engine is parsing the yield spread between German Bunds and US Treasuries, which has widened back in the dollar's favour. It's also quantifying the surprise component of the PMI release: while the headline beat, the market's focus quickly returned to the ECB's limited room to sound more hawkish than the Fed. Sentiment indicators tracked by TradeVisor show that speculative positioning had been leaning long euros, and this breakdown is likely squeezing those positions, accelerating the slide. In the coming sessions, the AI will monitor whether the 1.1310 support (a minor floor) holds and whether the double-top target draws in fresh sellers. If oil prices continue to ease and risk appetite recovers, the dollar could lose some steam, but the technical bias remains bearish until 1.1480 is reclaimed.

Looking Ahead: The FOMC Shadow

The calendar is not quiet. Next week brings US durable goods and the Fed's preferred inflation gauge, the PCE deflator. Any stickiness there could reinforce the dollar's charge. Meanwhile, eurozone inflation expectations and German Ifo data will test whether the PMI optimism is a fluke or a trend. TradeVisor's real-time alerts will flag when the spread of macro surprises tilts, and its pattern recognition engine will track whether the double top develops into a deeper corrective structure or stalls at the measured move. For now, the euro is fighting gravity with one hand tied behind its back. A sustained bid above 1.1380 would be the first sign that the bears are losing conviction. Until then, the slide has room to run.