Insights 
VT 
EUR/USD Short-term Outlook
Over 24 hours, EUR dipped to a low of 1.1504, closing at 1.1518, a 0.14% decline. Positive divergence is still noted, suggesting EUR might test 1.1490 before recovery risks increase. A sustained break below 1.1490 is unlikely, and the support at 1.1450 is not expected to be threatened. Resistance is around 1.1540, with a break above 1.1555 indicating that 1.1490 may not be reached soon.
In a 1-3 week outlook, a fall below 1.1540 was anticipated. Following EUR’s drop to 1.1520, analysts stressed that 1.1490 remains a key level. This view persists, with the understanding that passing 1.1580 would mean EUR is not weakening further. Should EUR breach 1.1490, the focus will shift to 1.1450.
The FXStreet Insights Team consists of journalists who compile selected market observations from experts, providing notes and insights from both commercial and internal analysts.
Trading Strategy Considerations
With momentum pointing towards a test of the 1.1490 level, we should consider buying near-term put options. Last week’s disappointing German manufacturing PMI data, which showed a second month of contraction at 48.5, reinforces this bearish outlook on the Euro. This strategy allows us to profit from the expected decline while limiting our initial risk.
However, the positive divergence on momentum indicators signals that any drop could be short-lived and reverse sharply. This makes outright shorting of futures risky, so a bear put spread, perhaps buying a 1.1500 put and selling a 1.1450 put, would define our risk. This structure would capture profits from a moderate slide to our target zone without exposing us to a sudden snap-back rally.
The dollar’s strength is also fueling this move, particularly after the strong U.S. jobs report from last Friday, November 1st, 2025, which showed a gain of 210,000 jobs against expectations of 180,000. This makes selling out-of-the-money call options with strikes above the 1.1580 resistance level an attractive way to collect premium. A significant Euro rally seems unlikely given the diverging economic data between the two regions.
Implied volatility in one-month EUR/USD options has ticked up to 7.8%, reflecting the market’s anticipation of a decisive move as we approach these critical support levels. We saw a similar pattern of weakening European data back in the third quarter of 2024, where momentum divergence preceded a final leg down before a sharp reversal. This historical context suggests that any bearish positions should be managed actively.
Should EUR/USD break below 1.1490, the focus will shift to 1.1450. The latest Eurozone flash CPI estimate for October 2025, which came in below forecast at 2.1%, gives us confidence that the European Central Bank will remain dovish. This fundamental backdrop supports further weakness in the currency pair for the coming weeks.
