Insights 
VT 
The Euro (EUR) is currently soft, experiencing a decrease of 0.2% against the US Dollar (USD) and is mid-performing among the G10 currencies, marking local lows of around 1.15. Limited fundamental releases and neutral comments from the European Central Bank accompany the renewed strength of the USD.
The EUR’s correlation to spreads suggests a market focused on relative central bank policy outlooks. The US-Germany 2Y yield spread remains in its range despite reduced EUR support from a hawkish Federal Reserve. The Relative Strength Index (RSI) of the EUR drifts towards the oversold threshold, with the currency fluctuating within a range between 1.1450 and 1.1550.
Euro Falls Below Support Level
The Euro has fallen below 1.1500, its support level, for five consecutive days, affected by the strong performance of the USD. As the week progresses, focus is expected to shift towards the release of the US ADP report and the ISM Services PMI, potentially impacting the currency’s movement further.
The British Pound (GBP) is also experiencing declines, reaching new lows near 1.3020, influenced by Chancellor Rachel Reeves’ remarks on borrowing costs. Meanwhile, gold has fallen to three-day lows near $3,930 per troy ounce, pressured by the strengthening USD and changing market expectations of a Federal Reserve rate cut.
We are seeing the Euro hit fresh lows around the 1.15 mark as the US dollar continues its rally. The divergence in central bank policy is the main driver, especially with recent data showing US inflation in September 2025 remained sticky at 3.4% while Eurozone inflation fell to just 2.1%. This gives the Federal Reserve little room to ease policy compared to a neutral European Central Bank.
For traders expecting this downtrend to continue, buying EUR/USD put options with strike prices below 1.14 appears to be a sound strategy. Looking back at the summer of 2025, we saw significant support form around the 1.1420 level, making it a viable target. The Cboe EuroCurrency Volatility Index (EUVIX) has ticked up to 7.8 from a low of 6.5 last month, suggesting traders are starting to price in bigger moves.
US Dollar Impact on Other Assets
Given that momentum indicators like the RSI are nearing oversold territory, we might see the decline pause in the coming weeks. Traders who anticipate the pair consolidating within the 1.1450-1.1550 range could consider selling volatility through strategies like an iron condor. This profits from stability, especially if upcoming US jobs data on November 7th fails to produce a major surprise.
We believe this US dollar strength is not an isolated story, as it continues to pressure other assets. We’ve seen Gold struggle to hold above $3,950 an ounce, and bearish option plays on gold futures could be considered. Similarly, with GBP/USD breaking below 1.30, put spreads on the pound may offer a way to capitalize on its weakness against the dollar.
