EUR/USD extends losses to 1.0605 as Fed rate cut expectations diminish

EUR/USD has declined for a second consecutive session, trading near 1.0605 on Monday, pressured by a strengthening US dollar as market participants scale back expectations for aggressive Federal Reserve rate cuts. The pair's mild bearish bias reflects growing confidence in US economic resilience, with recent data supporting the Fed's cautious approach to monetary easing. Market pricing now shows reduced probability of a December rate cut, shifting from 80% to approximately 65% over the past week. The dollar's broad strength is further supported by rising US Treasury yields, with the 10-year benchmark climbing above 4.45%. Technical indicators suggest continued downward pressure, with immediate support at 1.0580 (November low) and resistance at 1.0640 (50-day moving average). A break below 1.0580 could accelerate losses toward the 1.0500 psychological level, particularly if upcoming US inflation data exceeds expectations.