EUR/USD has lost 2.2% in 20 sessions and set a fresh 60-day low at 1.1311 as a hiking Fed and US 10-year yields above 5.2% keep the gap wide against a 2.50% ECB. RSI at 24 argues for a pause, but TNFX Research expects rallies toward 1.1400 to fade, with 1.1275 and then 1.1237 the October targets.
This week: Oversold, so a bounce toward 1.1371-1.1400 is likely first. NFP on 2 Oct decides whether 1.1275 (weekly S2, 1-week sigma low) is tested. Bias stays lower while 1.1400 caps.
End of October: Base case: an end-October close near 1.1237 if the Fed hikes on 28 Oct, one day before the ECB. A close above 1.1447 would mean the call is wrong.
Key levels
Resistance
- R11.13710
- R21.14000
- R31.14470
Support
- S11.13110
- S21.12750
- S31.12370
Scenarios
- Trigger
- NFP well below the +90k consensus with unemployment above 4.1%, then a soft CPI on 14 Oct
- Target
- 1.14470
Fed hike odds fall and a rebound from oversold levels lifts EUR/USD through 1.1400 to the weekly R1 at 1.1447. The SMA20 at 1.1509 is the stretch target.
- Trigger
- NFP near consensus, CPI still elevated, a 28 Oct Fed hike stays priced at 70-77%
- Target
- 1.12370
Bounces stall at 1.1371-1.1400, the 1.1311 low gives way, 1.1275 is tested and the pair ends October near 1.1237 (last minus 2x ATR).
- Trigger
- Strong NFP and a hot CPI push the US 10-year further above 5.2% and lift bets on more Fed hikes
- Target
- 1.11880
The downtrend accelerates: 1.1237 breaks and EUR/USD reaches 1.1188 (last minus 3x ATR) before the ECB decision on 29 Oct.
What drives it
- Fed at 3.75-4.00% with a second 25bp hike ~70-77% priced for 28 Oct; 16 of 18 officials see at least one more 2026 hike
- US 10-year above 5.2%, the highest since June 2007, keeps the yield gap in the dollar's favour
- ECB deposit rate 2.50% after the 10 Sep hike; its 29 Oct decision comes a day after the FOMC
- Brent around $106 and August energy CPI at +16.3% y/y keep the Fed focused on energy-led inflation
- Lower in each of the last three weeks, from 1.1622 to 1.1335; RSI 24.1 is oversold, so expect bounces before lower lows
Dates to watch
US jobs report (NFP, September), 15:30 Mecca timeConsensus +90k, unemployment 4.1%. The only payrolls report before the FOMC; a firm print cements hike odds and weighs on EUR/USD.
US CPI (September)August CPI was 3.4% y/y with energy +16.3%. Another hot print supports the dollar.
FOMC decisionA second 25bp hike is ~70-77% priced; the guidance on further hikes matters as much as the move.
ECB decisionDeposit rate 2.50% after the 10 Sep hike. A hawkish signal is the euro's best chance to push back.
Technical picture
Below SMA20 (1.1509) and SMA50 (1.1532). RSI14 24.1 is oversold, so snap-backs are likely; the broken 1.1353-1.1370 swing lows are first resistance. ATR14 0.0049 (about 49 pips a day); 20-day vol 0.24%/day.
What would change our view
A daily close above 1.1447 (weekly R1) voids the bearish call. A weak NFP with unemployment above 4.1% plus a soft CPI could squeeze it to the SMA20 at 1.1509.