EUR/USD in the red: Fed rate, IPO and geopolitics support the Dollar

RoboForex Analysis Department RoboForex

EUR/USD fell to 1.1170 on Tuesday, marking its fourth consecutive day of decline. Investors are bracing for a busy week of macroeconomic data and the Federal Reserve’s upcoming monetary policy decision.

Markets price in a 90% chance that rates will remain unchanged at the current meeting, while the odds of a rate hike in December remain high at around 82%. Additional signals on the Fed’s policy outlook will come from US GDP data and the PCE inflation index.

The dollar is also being supported by renewed interest in artificial intelligence following Anthropic’s IPO filing. Strong investment demand in the AI sector is seen as a factor supporting US economic growth and capital flows into the US.

Geopolitical developments also support the dollar. Fears that the US could resume strikes on Iran after the midterm elections are supporting demand for the US currency as a safe-haven asset.

Technical analysis

On the four-hour EUR/USD chart, the market completed the next leg of the downward wave around 1.1162. A consolidation range is currently forming above this level. The underlying trend remains downward, as the price holds below key resistance at 1.1223 and the upper boundary of the correction channel. The decline towards 1.1152 is expected to continue, with scope for the next impulse to develop towards 1.1133 and then the main target at 1.1034. The MACD indicator confirms this scenario: its histogram has moved into negative territory, while its signal line is pointing downwards. A change in the short-term structure would require the price to close above 1.1195.

On the hourly EUR/USD chart, the market completed its local correction near resistance at 1.1197 and formed a sequence of lower highs. A downward move is currently developing, with intermediate consolidation around 1.1165. Today, a decline towards support at 1.1157 is expected, and a break below this level would open the way towards 1.1122 and then 1.1100. After reaching the intermediate targets, a technical correction towards 1.1174 is possible, followed by a resumption of the decline. The Stochastic oscillator is near the 50 centreline, with its signal line turning downwards, indicating the likelihood of increased selling pressure. The priority scenario remains a continuation of the downward wave within the current four-hour structure. A move above 1.1182 would temporarily weaken downward momentum and create the conditions for a deeper correction.

Conclusion

EUR/USD remains firmly in the red, extending its losing streak to a fourth day as the dollar benefits from a combination of Fed rate expectations, renewed AI-driven investment flows following Anthropic’s IPO filing and safe-haven demand amid geopolitical tensions. Markets see a 90% chance of rates remaining unchanged this week but are pricing in an 82% probability of a December rate hike, with US GDP and PCE data set to provide further clues. Technically, the pair remains bearish below key resistance at 1.1223, with the next targets at 1.1152, 1.1133 and 1.1034. A short-term corrective bounce is possible given oversold conditions, but the broader downtrend remains intact unless the price closes above 1.1195.

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RoboForex Analysis Department

RoboForex

RoboForex Analysis Department provides timely market insights, expert technical analysis, and actionable forecasts across forex, commodities, indices, and equities.

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