Dollar Index: CPI Looms as Fed Pause Expectations Hold
The dollar’s major backdrop softened slightly on Tuesday as the pressure on the dollar from lower Treasury yields and falling oil prices reduced some of the upside from dollar inflation concerns. The 10-year Treasury yield fell approximately five basis points to 5.19%. The markets are assigning an 80.6% probability that the Federal Reserve leaves rates unchanged at its October 27-28 meeting.
The consumer price index is the next major report to watch out for in the U.S. Moreover, the Federal Reserve Bank of Cleveland President Beth Hammack said that underlying inflation is around 2.5%-3.0% and that the labor market does not need to be damaged unnecessarily to cool inflation; however, she argues that demand still needs to be weakened.
EUR: German Inflation Adds Pressure as French Growth Stalls
Germany’s inflation increased to 3.3% in September from 2.9% in August, adding more pressure on the ECB to keep policy restrictive.
France remains the bigger concern. The Bank of France estimates the economy grew by only 0.1% in the third quarter, as growth in services offset weakness in manufacturing, construction, and agriculture.
GBP: BoE Tightening Bets Meet Fiscal Restraint
Expectations for tighter Bank of England policy are supporting sterling, and a November rate increase is priced at around 90% probability. Bank of England policymaker Megan Greene also argues the 3.75% Bank Rate may not be restrictive enough.
The IMF expects UK growth to average 1.3% in 2026 and 1.2% in 2027. The forecasts for inflation are for it to average 3.3% in 2026. The combination of restrictive monetary and fiscal policies is putting pressure on the UK economy ahead of the October 28 budget.
EUR/USD Price Forecast
Every new EUR/USD analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all EUR/USD forecastsU.S. Dollar Index Technical Analysis: DXY Holds Rising Trendline as 102.61 Remains the Breakout Trigger
The U.S. Dollar Index has edged up to 102.40 on the 4-hour chart, and what is notable is that price continues to respect the rising trendline and is comfortably above the short-term moving average. Price structure is still positive, as higher lows are still in the process of being developed; however, there have been some repeated hesitations under 102.61, which suggests that price has not cleared a clean breakout.
The first resistance is at 102.61, above which price would aim for 102.97 and 103.36. Support comes in at 102.10, then 101.75 and then 101.43.
Momentum is neutral as the Relative Strength Index is near the 50-neutral level. As long as price continues to trade above 102.10 and the rising trendline, I would remain bullish. A break below 101.75 would negate this structure. A break above 102.61 would open the upside to 102.97 and 103.36.
GBP/USD Technical Analysis: Sterling Compresses Above 1.3222 as Triangle Breakout Nears
The GBP/USD pair is currently trading at 1.3229. On the 2-hour chart, what is noticeable to me is the narrowing trade between the falling trendline and the rising support line. The pair is currently trading above the 1.3222 support level and is approaching the rising support line. With the longer-term moving average still above, this leaves Sterling in a compressed trade where the next move out could be the breakout.
Looking at the resistance side of the trade, I’ll start at 1.3284. If the pair is able to break and close above 1.3284, then the next area of interest would be at 1.3323 and then 1.3368. On the other side of the trade, 1.3222 is the first support level, with 1.3180, 1.3147 and 1.3113 becoming more relevant to the downside.
Momentum for the pair is neutral with the RSI holding just above the mid line. Until the pair is able to move above 1.3284 or below 1.3180, the trade will remain neutral. A break above 1.3284 would give the pair a slightly higher target while a breakdown below 1.3180 would bring lower targets into play.
EUR/USD Technical Analysis: Euro Tests Trendline Resistance as 1.1218 Becomes the Key Recovery Level
EUR/USD is trading at 1.1181 on the 2-hour chart after bouncing off 1.1161 support. Currently, the price is near the 1.12-area and pressing against a descending trendline, with both moving averages above it, suggesting the bearish trend is likely to continue.
The first resistance I am looking at is at 1.1218, above which we would see 1.1275 and 1.1315. As for support, we have 1.1180-1.1161, and below that we have 1.1128 and 1.1092.
RSI is neutral and in the middle, suggesting that the pair may consolidate rather than trend strongly in either direction. Until it breaks above 1.1218, I’ll maintain a bearish bias. A break below 1.1161 would increase the likelihood of a move toward 1.1128.
