It's good where we are not. It's bad where we are. This is becoming true for the euro. Whatever the regional currency touches becomes poisoned. The fall in oil prices, previously seen as a bullish factor for EUR/USD, no longer stops the decline in the major currency pair because it reduces the chances of European Central Bank monetary tightening. The futures market prices it at 38% in October, lower than 54% for the Federal Reserve. The same applies to other drivers that have supported the rally in the past.

Thus, the US dollar is considered a safe-haven asset and typically falls when global risk appetite and equity indices rise dramatically. Not this time. The surge in the Nasdaq Composite and S&P 500 to record highs does not stop EUR/USD bears from continuing the attack that began at the FOMC meeting. Investors believe Kevin Warsh has restored confidence in the Fed and US assets, prompting capital to flow from Europe to North America.

European business activity dynamics

The euro is not helped even by the rise in business activity in the eurozone to the highest levels in more than three years. German and French purchasing managers' indices pleasantly surprised, indicating the economy's resilience to geopolitical and other shocks.

At the same time, the OECD is raising growth forecasts for German, Spanish and Italian GDP. As a result, the assessment of the currency bloc's gross domestic product for 2026 is raised by 0.2 percentage points to 1%. All good, beautiful marquee?

OECD forecast dynamics for European countries

In reality, not so much. The more resilient the economy, the more the ECB can raise rates, which will ultimately work against the eurozone. Besides, everything is relative. Markets are awaiting US business activity data, which will most likely also please. Europe does not have as strong a trump as investments in artificial intelligence technologies, which lead to productivity growth, increase tax revenues, and accelerate GDP.

Thus, faster Fed monetary tightening, capital flows from Europe to the US, and American exceptionalism push EUR/USD quotes south. A strong economy does not help the euro because, amid rising political risks in Germany and France, investors flee the continent like rats from a sinking ship. Falling oil, which reduces the probability of ECB rate hikes, does not become a lifeline for the regional currency either. Everything is against the major currency pair.

Technically, on the daily chart, EUR/USD is approaching the first of two previously indicated target levels at 1.1400 and 1.1300. Short positions on the euro against the US dollar formed on the rebound from resistance at 1.1495 and increased on the breakout of support at 1.1455 should be held and periodically increased.