EUR/USD Forecast: Pair Eyes 1.2085 as Fed Cut Signals Dovish Cycle

Meanwhile, the Federal Reserve cut its benchmark rate by 25 basis points to 4.25%, with only Steven Miran, appointed by President Donald Trump a day earlier, voting for a 50 bps reduction. During the press conference, Fed Chair Jerome Powell explained the shift to a dovish stance by pointing to slower GDP and labor market growth, as well as long-term inflation expectations moving closer to the 2.0% target. He also noted there was no need to accelerate easing, since consumer prices could temporarily rise this year due to tariffs. As the decision was already priced in, the U.S. dollar managed to gain 0.42% after briefly updating its yearly low, signaling a continued long-term downtrend. According to the CME FedWatch Tool, the probability of another 25 bps cut at the October 29 meeting stands at 89.8%, with just 10.2% odds of no change. Meanwhile, GDP forecasts were revised upward: 1.6% for 2025 (vs. 1.4% previously), 1.8% for 2026 (vs. 1.6%), and 1.9% for 2027 (vs. 1.8%). 

Support and Resistance Levels

The long-term trend remains bullish: this week, quotes broke through the resistance at 1.1770 and the July high at 1.1825, before testing 1.1900. A correction toward the support area at 1.1770–1.1720 offers opportunities for long positions targeting 1.1900.

The medium-term trend is also bullish: in September, the price broke through the 1.1690–1.1663 zone and this week reached zone 2 (1.1918–1.1895). A move beyond this could open the way toward zone 3 (1.2150–1.2127). Long positions remain relevant on a pullback from the key support area at 1.1686–1.1663, with targets near the weekly high of 1.1915.

Resistance levels: 1.1900, 1.2085, 1.2250.

Support levels: 1.1770, 1.1720, 1.1575.

Trading Scenarios and EUR/USD Forecast

Long positions may be opened from 1.1770 with a target of 1.1900 and a stop-loss at 1.1720. Timeframe: 9–12 days.

Short positions may be opened below 1.1720 with a target of 1.1575 and a stop-loss at 1.1790.