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Euro/Dollar Hits 10-Week Losing Streak – What’s Next for the Currency Pair? | Analyzing the Fed’s Impact on Forex Markets

The Litecoin price INRforeign exchange markets witnessed another turbulent week as the EUR/USD extended its unprecedented losing streak to ten consecutive weeks. This remarkable trend reflects the growing divergence between US monetary policy and European economic fundamentals.Federal Reserve's Hawkish PostureLast week's FOMC meeting delivered a surprisingly hawkish message despite maintaining current rates. The updated dot plot revealed expectations for higher rates persisting through 2024, contrasting sharply with market predictions. This policy stance continues to support dollar strength against major counterparts.Eurozone Economic WoesFresh PMI data painted a concerning picture of Eurozone economic health. The composite PMI remained below the crucial 50 threshold at 47.1, with manufacturing activity particularly weak at 43.4. These figures suggest the region's economic contraction is deepening rather than stabilizing.Technical OutlookThe currency pair has broken through previous support levels, currently trading near 1.063. While the RSI indicates potential for a short-term rebound, the overall trend remains bearish unless EUR/USD can reclaim the 21-day moving average resistance near 1.0750.Japanese Yen Under PressureThe Bank of Japan maintained its ultra-loose policy stance, disappointing traders anticipating any hawkish signals. USD/JPY surged past 148 as the policy divergence between Japan and other major economies continues to widen. Market participants now watch the 150 level closely for potential intervention.Key Events to WatchThis week's economic calendar features several potential market-moving events:- US PCE inflation data (August)- Eurozone CPI figures (September)- Speeches from Fed and ECB officialsThese releases could significantly impact expectations for future monetary policy moves in both regions, potentially determining whether the EUR/USD downtrend continues or sees a meaningful correction.Market SentimentTraders remain cautious about catching the falling knife in EUR/USD, with many awaiting clearer signs of either Eurozone economic stabilization or Fed policy softening before considering meaningful long positions. The current environment continues to favor dollar strength across most currency pairs.