EUR/USD Forecast and News
The EUR/USD pair trades in positive territory around 1.1190 during the early European trading hours on Friday. A hawkish pause from the European Central Bank (ECB) provides some support to the Euro (EUR) against the US Dollar (USD). Traders brace for the preliminary readings of Q3 Gross Domestic Product (GDP) from Germany and the Eurozone later on Friday.
Technical Analysis
In the daily chart, EUR/USD retains a bearish tone as it holds below the 100-day simple moving average (SMA) and beneath the Bollinger Bands middle line. The pair is edging closer to the lower Bollinger band support, while the 14-period Relative Strength Index around 41 remains subdued, suggesting weak recovery momentum despite the recent stabilization.
On the topside, immediate resistance level is clustered near the Bollinger Bands middle line at 1.1200, en route to the upper boundary of Bollinger band 1.1265 and the June 24 low of 1.1325. The next hurdle to watch is the 100-day SMA at 1.1432.
On the downside, the lower limit of Bollinger band at 1.1135 offers initial support level. A clear break below this level would likely open the door to the 1.1100 psychological level, followed by the May 12, 2025 low of 1.0951.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fundamental Analysis
| Time | Event | Impact | Actual | Consensus | Previous |
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The ECB decided to hold its deposit rate at 2.50%, as widely expected, after raising it by 25 basis points (bps) in September. According to a statement, the Governing Council said that rising energy prices posed upside risks to the inflation outlook and downside risks to growth, but that underlying inflation and wages were so far broadly stable.
Money markets were pricing in around a 67% chance of a rate hike in December following the announcement, according to LSEG data.
Euro holds steady as ECB faces energy shock and December hike debate
Strategists at Scotiabank note that market pricing still leans toward additional tightening, with “markets expect a further 25bps hike in December, where many forecasters (including Scotia) think policymakers will halt.” They caution that “we likely won’t get insight into that prospect today,” but expect President Lagarde to “frame the outlook in a way that keeps the door open to a December move amid elevated energy prices whilst maintaining optionality in the face of uncertainties.”
The bank highlights the inflation challenge posed by the energy backdrop, pointing out that “benchmark European Natgas prices are roughly double the ECB’s September forecast and some 30% above the ‘adverse’ scenario amid tight supplies and low storage.” From a technical perspective, Scotiabank remains “neutral/bearish – The EUR remains technically soft but key support defined by the mid-October low at 1.1113 continues to hold.”
Lagarde flags upside inflation risks but sticks to measured Euro stance
The FXS Speechtracker score of 6.2/10 is only marginally above the historic 6.1/10 baseline, signalling a broadly consistent tone with a slight tilt toward concern on inflation. Lagarde highlighted that the Euro area economy is expanding in Q3 and that near-term growth should be underpinned by AI investment, government spending and a pickup in exports, but also stressed that renewed energy price increases, tighter financial conditions and fiscal uncertainty are weighing on confidence and leave growth risks skewed to the downside.
On inflation, the emphasis on energy prices rising beyond the baseline, early-stage pricing chain pressures, wage growth around 2.5%-2.8% and headline inflation likely well above target in coming quarters marks a hawkish shift, reinforced by the statement that risks to inflation are to the upside. Yet the unanimous decision to hold rates, the focus on a “measured approach” and the importance of incoming data and underlying inflation in the next information-rich period suggest the ECB is not pre-committing to further tightening, which tempers the hawkish bias and keeps the Euro supported but capped pending new data.
EUR/USD Forecast Poll
1 Week
- 50%
- Bullish
- 25%
- Bearish
- 25%
- Sideways
1 Month
- 65%
- Bullish
- 18%
- Bearish
- 17%
- Sideways
1 Quarter
- 76%
- Bullish
- 6%
- Bearish
- 18%
- 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.