The EUR/USD currency pair faced renewed selling pressure on Thursday, October 29, as demand for the US dollar limited its recovery from recent lows. Traders are monitoring the critical 1.1115–1.1110 support zone ahead of the European Central Bank (ECB) policy decision and fresh US economic data. The ECB is widely expected to leave interest rates unchanged, while inflation concerns and fiscal uncertainty in France continue to weigh on the euro. Meanwhile, the Federal Reserve maintained US rates at 3.75%-4.00%, keeping monetary policy expectations central to currency-market sentiment.
ECB Decision and Dollar Strength
The euro struggled to extend its previous session’s recovery as the US dollar attracted renewed buying interest. The Federal Reserve’s October 28 decision kept the benchmark federal funds rate unchanged following a 10-2 vote. Two policymakers favored a quarter-percentage-point increase, while the central bank noted that inflation remained elevated.
The decision reinforced uncertainty over the future path of US monetary policy. Higher US interest rates relative to eurozone rates can support the dollar by improving the appeal of dollar-denominated assets, although currency movements also depend on market expectations and economic conditions.
Investors are also watching France’s fiscal position and political uncertainty ahead of its next election. Concerns about government debt and political gridlock could undermine confidence in the euro, adding pressure to the shared currency.
The ECB’s policy announcement is therefore a major near-term catalyst. Traders will assess its interest-rate decision and guidance for clues about whether eurozone monetary policy could tighten in December. Upcoming US economic releases, including inflation and growth indicators, may further influence the dollar.
EUR/USD Technical Outlook Turns Bearish
EUR/USD remained below the 100-period exponential moving average (EMA) on the four-hour chart, reinforcing the pair’s negative near-term structure. The Relative Strength Index (RSI) stood near 40.2, indicating subdued upward momentum. Although the Moving Average Convergence Divergence (MACD) indicator improved slightly, that change alone does not confirm a bullish reversal.
The 1.1115–1.1110 region is the immediate technical focus. A sustained break below this zone could expose EUR/USD to another leg lower after its prolonged decline over recent weeks.
Key levels traders are monitoring include:
- Immediate support: 1.1115–1.1110.
- Intraday reference: 1.1140.
- Initial resistance: 1.1200.
- Major technical barrier: 1.1215, near the 100-period EMA.
EUR/USD Forecast: Key Levels Ahead
A decisive move below 1.1110 would strengthen the bearish outlook and potentially encourage additional selling. However, support must be broken convincingly before a deeper decline can be considered confirmed.
On the upside, the 1.1140 area may help traders assess whether the pair is stabilizing. A recovery toward 1.1200 would encounter initial resistance, followed by the 1.1215 moving average. Sustained trading above the latter level would weaken the immediate bearish structure and improve prospects for a broader recovery.
Conclusion
EUR/USD remains vulnerable as traders weigh US monetary policy, France’s fiscal risks and the ECB’s next move. The 1.1115–1.1110 zone is the critical downside threshold, while 1.1215 represents an important recovery barrier. The ECB decision and incoming US data could determine whether the pair extends its decline or establishes a more durable base. Technical levels indicate potential areas of interest, not guaranteed price outcomes.
Sources & Methodology
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