EUR/USD Forecast and News
EUR/USD trades on the back foot on Friday as the US Dollar (USD) regains some ground alongside US Treasury yields following Thursday’s decline. France’s fiscal concerns add pressure on the Euro (EUR), while traders look ahead to next week’s Federal Reserve (Fed) and European Central Bank (ECB) interest rate decisions.
Technical Analysis
EUR/USD holds marginally above the 200-week Simple Moving Average (SMA) at 1.1105 but remains below the 50-week SMA at 1.1585 and the 100-week SMA at 1.1379, leaving sellers in control..
The pair also trades below the 38.2% Fibonacci retracement at 1.1355 and the 23.6% retracement at 1.1634, reinforcing a topside cap, while the Relative Strength Index (RSI) at 34 hovers just above oversold territory and the Moving Average Convergence Divergence (MACD) remains negative, both suggesting persistent, though not extreme, selling pressure within a modest trend environment indicated by the Average Directional Index (ADX) around 20.
On the downside, initial support emerges near the 50.0% Fibonacci retracement at 1.1130, closely followed by the 200-week SMA at 1.1105, with deeper bearish extension exposing the 61.8% retracement at 1.0905 and the 78.6% level at 1.0585 before the structural floor around the 100.0% retracement at 1.0177.
On the topside, a first hurdle is seen at the 38.2% Fibonacci retracement at 1.1355, ahead of the 100-week SMA at 1.1379, while a more meaningful recovery would require a weekly close above the 50-week SMA at 1.1585 and the 23.6% retracement at 1.1634, which together define a dense resistance band capping the broader rebound.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fundamental Analysis
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At the time of writing, the pair trades around 1.1190, down 0.22% on the day. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 101.82 after touching a three-week low of 101.45 on Thursday.
Fed and ECB seen pausing now but primed for December rate hikes
Economists at Commerzbank argue that “the Fed and the ECB thus have good reasons to pause in October, not least to gain more clarity on the economic and geopolitical conditions.” Looking ahead, they expect policy tightening to resume, with the bank judging that “in December, however, both central banks are likely to respond to persistently high inflation and raise interest rates—as priced in by the futures markets—by 25 basis points.” Commerzbank stresses that this guidance is not without caveats, adding that “the forecast for the ECB is contingent on the situation in the French government bond market not escalating.”
EUR/USD Forecast Poll
1 Week
- 25%
- Bullish
- 50%
- Bearish
- 25%
- Sideways
1 Month
- 65%
- Bullish
- 18%
- Bearish
- 17%
- Sideways
1 Quarter
- 76%
- Bullish
- 24%
- Bearish
- 0%
- Sideways
About EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a term used t o describe the most important currency pairs in the world. This group also includes GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of the Euro Dollar pair stems from its representation of two of the world's largest economies: the Eurozone and the United States.
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as "the Cable", a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States. As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).
Influential Institutions & People for the EUR/USD
The European Central Bank (ECB)
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone. With its beginnings in Germany in 1998, the ECB's mandate is to maintain price stability in the Eurozone, so that the Euro's (EUR) purchasing power is not eroded by inflation. As an entity independent of individual European Union countries and institutions, the ECB targets a year-on-year increase in consumer prices of 2% over the medium term. Another of its tasks is controlling the money supply. This involves, for instance, setting interest rates throughout the Eurozone. The European Central Bank's work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde has been the President of the ECB since November 1, 2019. Her speeches, statements and comments are an important source of volatility, especially for the Euro and the currencies traded against the European currency.
ECB official website, on X and YouTube
The Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website, on X and Facebook
Christine Lagarde
Christine Lagarde was born in 1956 in Paris, France. Lagarde, who graduated from Paris West University Nanterre La Défense, became President of the European Central Bank (ECB) on November 1, 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund (IMF) between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007-2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005-2007).
Kevin Warsh
Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve in May 2026, for a four-year term ending in 2030. His term as a member of the Board of Governors will expire in May 2040. Warsh, born in Albany (New York) on April 13, 1970, is an American financier and attorney who already served as a member of the Fed Board of Governors from 2006 to 2011 and was significantly involved in the central bank's response to the financial crisis. Before that, he served as a special assistant to the president for economic policy and the executive secretary of the National Economic Council under President George W. Bush.