EURUSD slides to new lows, challenges major support cluster

EURUSD dropped sharply as traders processed a more hawkish tone from Federal Reserve Chair Kevin Warsh. The likelihood of a rate increase now stands at about 60%, compared with roughly 30% earlier in the week. This repricing lifted U.S. yields and the greenback, driving the euro toward a significant technical support zone.

During the session, the currency pair attracted sellers beneath its 100- and 200-hour moving averages. The subsequent fall under the 200-day moving average, now around 1.1630, reinforced the bearish technical outlook and set the stage for further downside.

The euro is currently testing a swing region bounded by 1.15937 and 1.15872. Beneath that range lies the 38.2% Fibonacci retracement of the rally from July's low, at 1.15733, as well as the ascending 100-day moving average, situated near 1.1570. Collectively, these marks create a key support cluster.

This is the zone where buyers must step in to halt the slide. Defending this cluster might trigger a pullback toward 1.16215 and the 200-day moving average at 1.16302. Still, to regain any substantial control, buyers would need to push back above the 100- and 200-hour moving averages, located around 1.1655–1.1660.

On the other hand, a durable breach beneath the 100-day moving average would reinforce the bearish sentiment and probably spur more selling. The next levels to the downside are around 1.15578, then the 50% retracement at 1.15356.

Mirroring the dollar's strength, yields have moved higher—the two-year has climbed 10.31 basis points to 4.335%, and the 10-year added 5.2 basis points to reach 4.724%. Major equity indexes are trading lower: the NASDAQ 100 fell 0.70%, the Russell 2000 fell 1.21%, and 8 NASDAQ composite declined 0.44%.

Overall, sellers remain in command, but the EURUSD has arrived at a technically crucial decision point. Buyers now have a level to lean on and manage risk. Should that support break, however, the path lower would widen further. Stay alert. Be ready.