Key Takeaways

-EURUSD trades near 1.1154 after rebounding from the 1.1113 support area, with price returning towards its nine-period moving average.

-The Fed held rates at 3.75%-4.00% in a 10-2 vote, with two officials favouring a 25-basis-point increase.

-US Treasury yields near 5% continue to support the dollar, although the pair’s direction also depends on European rate expectations.

-The ECB’s 29 October policy decision is the next major catalyst for the euro.

-Traders are watching 1.1133-1.1140 support, with 1.1160-1.1170 and 1.1180-1.1200 as key recovery levels.

EURUSD is consolidating after a rebound from 1.1113, with price recovering towards the nine-period moving average, which has started to turn higher.

However, the pair remains below earlier trading areas around 1.1180-1.1200, leaving the broader decline intact. Recent candles show resistance developing around 1.1160-1.1170, and traders are now assessing whether the recovery can extend or whether another rejection may bring renewed downside pressure.

Why Traders Are Watching EURUSD

Attention is focused on the Fed’s latest decision and the upcoming ECB meeting.

The Federal Reserve held its target range at 3.75%-4.00% on 28 October, signalling strong economic expansion and elevated inflation. That combination supports a hawkish reading of the decision, although the Fed did not commit to a December hike.

The US 10-year Treasury yield is hovering around 5.04% following the decision, while the two-year yield, which is particularly sensitive to policy expectations, stands at 4.78%. Both continue to support the dollar.

Oil is also keeping inflation concerns in focus as Iran-related conflicts affect energy supplies. A further rise could increase fuel and transport costs and slow progress towards lower inflation, strengthening the case for a Fed hike. The euro area is also exposed to higher energy import costs, which can squeeze household spending and business margins.

Key factors influencing EURUSD include:

-Federal Reserve policy: The split vote keeps the possibility of further tightening in focus.

-US Treasury yields: Yields near 5% continue to underpin the dollar.

-ECB guidance: The decision and press conference will shape European rate expectations.

-Energy prices: Higher oil could pressure both inflation and euro-area growth.

Key Trading Levels

EURUSD is trading around 1.11538, close to the 1.1150-1.1155 consolidation area near the nine-period moving average.

The immediate test is whether the pair can hold 1.1133-1.1140 and clear 1.1160-1.1170. A close above 1.1170 followed by a successful retest could support a move towards 1.1180, then 1.1200. A sustained break above 1.1200 with higher lows could extend gains towards 1.1220-1.1230, with 1.1261 as the broader resistance reference.

On the downside, a rejection at 1.1160-1.1170 followed by an hourly close below 1.1133 could bring 1.1113 and 1.1101 back into focus. A sustained break below 1.1100-1.1101 with a failed reclaim would suggest sellers have regained control, potentially exposing 1.1080 and 1.1050.

EURUSD Prediction: Can the Euro Extend Its Recovery?

EURUSD’s next move will depend on whether buyers can hold current support while the market digests the ECB decision and guidance.

The pair could rise if softer US inflation or employment data reduces expectations for further Fed tightening. Falling US yields, a more hawkish ECB message or easing energy pressures could also support the euro. On the other hand, greater emphasis on slowing growth, higher oil prices or a comparatively cautious ECB outlook could add pressure, particularly if the Fed continues to signal limited room for easing.

Upcoming US employment and inflation releases will be the next major drivers, as they will shape expectations on whether a December Fed hike becomes more likely.

For a deeper analysis of EURUSD’s technical levels, central bank catalysts and potential scenarios, read this article.