EUR/USD touches three-week low, around 1.1030 amid stronger USD

• EUR/USD continues to lose ground for the fifth straight day amid sustained USD buying interest.
• Diminishing odds for an aggressive Fed policy easing and geopolitical risks underpin the buck.
• Bets that the ECB will cut rates in October weigh on the Euro and exert pressure on the major.

The EUR/USD pair attracts sellers for the fifth successive day and touches a fresh three-week low, around the 1.1030 area during the Asian session on Thursday. Bearish traders now look to extend the downward momentum further below the 50-day Simple Moving Average (SMA) amid broad-based US Dollar (USD) strength.

Against the backdrop of the upbeat US JOLTS Job Openings survey, the better-than-expected ADP report on Wednesday pointed to a still resilient labor market. This, along with the Federal Reserve (Fed) Chair Jerome Powell's hawkish tone earlier this week, forced investors to scale back their bets for another oversized rate cut at the November FOMC meeting. Apart from this, the risk of a full-blown war in the Middle East assists the safe-haven Greenback to build on this week's goodish recovery from its lowest level since July 2023 and climb to a three-week top on Thursday. This, in turn, is seen as a key factor that continues to exert downward pressure on the EUR/USD pair. 

The shared currency is further undermined by increased bets that the European Central Bank (ECB) will cut interest rates in October after data released earlier this week showed that the Eurozone inflation fell to 1.8% in September, below the 2% target. ECB Governing Council member Martins Kazaks noted that risks to the economy have become more pronounced and the need for cautious monetary policy adjustments. This contributes to the offered tone surrounding the EUR/USD pair and supports prospects for an extension of this week's sharp pullback from a 19-month peak.

Even from a technical perspective, acceptance below the 50-day SMA for the first time since early August could be seen as a fresh trigger for bearish traders and validate the negative outlook. Market participants now look forward to Thursday's economic docket - featuring the final PMI prints from the Eurozone and the US, followed by the usual US Weekly Initial Jobless Claims and the US ISM Services PMI. This, along with speeches by influential FOMC members, will drive the USD demand and allow traders to grab short-term opportunities around the EUR/USD pair.