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The euro reaches a potential turning point versus the dollar

EUR/USD has broken below $1.135 and reached oversold conditions, raising the possibility of a pause in the euro’s sell-off while resistance builds near former support.

Michael J Kramer

Founder, Mott Capital Management

05 Oct 2026, 13:30

EUR/USD has broken through support at $1.135 and is now reaching oversold conditions, with a relative strength index below 30 and the exchange rate trading at its lower Bollinger Band. This does not mean the decline in EUR/USD is over, but it may mean the euro’s sell-off against the dollar is due for a pause.

If EUR/USD reverses, the recovery may be short-lived, with strong overhead resistance near the 10-day exponential moving average and around $1.135, which has shifted from a major support level to a major resistance level. If the currency pair can rise above resistance, it could extend its recovery further, potentially returning to the 20-day moving average at $1.14.

However, oversold conditions can also work off through sideways trading, which may ultimately be a bearish indication. This would suggest EUR/USD lacks the buying interest needed to push the exchange rate higher and could ultimately set up the next leg of the decline.

EUR/USD has been weakening for fundamental reasons, including fiscal concerns and high oil and diesel prices. This means that, for EUR/USD to rally sustainably, the news flow will likely need to change.

If EUR/USD continues to decline and cannot stabilise or enter a period of consolidation, the next support area could come into play, potentially pushing the exchange rate to around $1.109. This level corresponds to a low established on 12 May.

EUR/USD daily, February 2023 – present

Source: TradingView, 5 October 2026

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EUR/USD reaches a critical region of support

EUR/USD has fallen back to an important support area after a more hawkish-than-expected FOMC meeting strengthened the US dollar.

The EUR/USD may be close to breaking out

EUR/USD is trading above its 200-day moving average and approaching resistance near $1.1660, with a breakout potentially opening the way for further gains.

EUR/USD is attempting to break out

EUR/USD has extended its recovery after weaker-than-expected US ADP employment data and is testing resistance around $1.155. A confirmed breakout could put $1.161 and the 200-day moving average near $1.163 in focus, although the 7 August US employment report remains the main risk.