EUR/USD Price Forecast: About to challenge October’s monthly low

EUR/USD Current price: 1.1560

• The European Central Bank left interest rates unchanged as widely anticipated.
• US President Donald Trump announced a deal with Chinese leader Xi Jinping.
• EUR/USD under strong selling pressure and poised to challenge October lows.

The EUR/USD pair fell towards 1.1577 on Wednesday, as the US Dollar (USD) surged on the back of the Federal Reserve (Fed) monetary policy announcement. The central bank cut the benchmark interest rate by 25 basis points (bps) to a range of 3.75% - 4.0% as expected, but Chair Jerome Powell delivered some hawkish remarks that resulted in speculative interest rolling back bets on additional cuts. Powell said that the 25 bps cut was “risk management,” adding that a December interest rate cut is far from granted. His words boosted demand for the USD and sent Wall Street sharply lower.

As the market digested the news, demand for the Greenback receded, helping EUR/USD trim part of its losses. The pair peaked at 1.1637 on Thursday, despite mixed European data.

Germany released the preliminary estimate of the Q3 Gross Domestic Product (GDP), which showed the economy did not grow in the three months to September. The reading was better than the -0.3% posted in Q2, but still discouraging. The country also released the preliminary estimate of the October Harmonized Index of Consumer Prices (HICP), which rose at an annualized pace of 2.3% as expected. The monthly HICP rose by 0.3%, slightly higher than the 0.2% posted in September.

Also, the EU GDP in Q3 was up 0.2%, better than the previous 0.1%, while October Consumer Confidence printed at -14.2, matching September reading and expectations.

Other than that, US President Donald Trump celebrated an agreement with his Chinese counterpart Xi Jinping, and reduced fentanyl-related tariffs to 10% “immediately.” He also reported that China will resume soybean buying and that they have settled the rare earths issue.

The USD resumed its advance with EUR/USD falling to a fresh weekly low of 1.1549 ahead of Wall Street’s opening and the European Central Bank (ECB). There was no particular catalyst triggering such a USD run, but an accumulation of positive USD headlines.

The ECB left interest rates unchanged as widely anticipated, having no real impact on the EUR. The accompanying statement shed no new light on monetary policy, as it repeated that officials will keep deciding meeting by meeting what’s best to keep inflation around their 2% goal, adding that the assessment of the inflation outlook is broadly unchanged. President Christine Lagarde is giving a press conference, but her words are unlikely to surprise.

Across the pond, and as the United States (US) government shutdown continues, there is no data to take care of. A couple of Fed officials, however, will be on the wires and may deliver some monetary policy-related comments, which may help clarify what Powell said on Wednesday.

EUR/USD short-term technical outlook

In the 4-hour chart, EUR/USD is currently trading at around 1.1560, sharply down for the day. Price sits well beneath all key moving averages, with the 20 SMA standing at 1.1635, the 100 SMA at 1.1623, and the 200 SMA at 1.1683, creating a dense resistance cap overhead. The 100 and 200 SMAs continue to post consecutive lower readings, underscoring a dominant bearish tone, while the 20 SMA has rolled over and edged south between the longer gauges, indicating sellers remain in control and hinting at additional slides ahead. The Momentum indicator heads sharply lower below its 100 line, while the RSI dropped to 32.7 and is trending lower, suggesting downside risks persist before any meaningful corrective bounce. Immediate resistance clusters at 1.1623–1.1635 (100/20 SMAs). Failure to reclaim 1.1623–1.1635 keeps the path of least resistance to the downside in the near term.

In the daily chart, EUR/USD aims to extend its slide, with a bearish 20 SMA sliding below the 100 SMA and accelerating south, suggesting sellers hold the upper hand despite the longer-term uptrend. The 20 SMA stands at 1.1632, while the 100 SMA, now near-flat at 1.1665, caps the upside. Finally, the 200 SMA continues to advance at 1.1309. Additionally, the Momentum indicator has rolled over into negative territory, reaching lower lows, which points to growing bearish traction and raises the risk of additional slides. The RSI has slipped to 39.5 and is trending lower, not yet in oversold territory, leaving scope for further downside before a meaningful bounce. A daily close back above 1.1632 would be needed to temper selling pressure and expose 1.1665; otherwise, failure below the short-term averages keeps the near-term risks skewed to the downside toward the 200-day base, particularly if the pair falls below 1.1540, October's base.

(This content was partially created with the help of an AI tool)