EUR/USD Holds Near 1.1600 Ahead of Eurozone CPI and Fed Minutes

At the same time, prospects for further easing by the US Federal Reserve remain at the centre of traders’ attention. According to the CME Group FedWatch Tool, the current probability of a 25-basis-point rate cut in December has slipped to 48.9% and could fall further after the publication of the October meeting minutes, as well as labour-market data that start to roll in this week.

It is worth recalling that the US federal government only recently resumed operations after President Donald Trump signed a stop-gap funding bill that extends the budget through 30 January 2026. However, the core dispute between Democrats and Republicans that triggered the shutdown remains unresolved: in December, Congress is expected to vote on extending subsidies under the Affordable Care Act (Obamacare), which are due to expire at the end of the year. Tomorrow at 15:30 (GMT+2), the September US labour-market report will be released. Economists expect nonfarm payrolls to increase by 50.0K after a gain of 22.0K in the previous month, with the unemployment rate likely to remain at 4.3% and average hourly earnings at 0.3% m/m and 3.7% y/y. If the data meet expectations, this could provide the Fed with an additional argument in favour of leaving monetary policy unchanged.

Meanwhile, the ECB has warned eurozone banks that they must prepare for “unprecedented shocks” that could cause severe disruptions in the financial system. In supervisory priorities for the next three years, published on Tuesday, the regulator notes that in order to mitigate risks, credit institutions will need to build capital buffers, modernise their technological infrastructure and adapt their governance frameworks more actively to shifting conditions. In the ECB’s view, geopolitical tensions, changes in global trade and demographics, climate and natural crises, as well as technological disruptions, are amplifying the sector’s vulnerabilities and raising the probability of rare but extreme events. The regulator has recommended that financial institutions closely monitor their dependence on foreign markets, both through overseas operations and through lending to exporters and exposure to foreign-currency risks.

Support and resistance levels

On the daily chart, Bollinger Bands are turning sideways: the price range is virtually unchanged, remaining wide enough for the current level of market activity. MACD is turning lower, forming a fresh sell signal as the histogram moves to cross below the signal line. Stochastic is showing a more confident decline and is quickly approaching the 20 mark, pointing to the risk of the single currency becoming oversold in the ultra-short term.

Resistance levels: 1.1600, 1.1636, 1.1668, 1.1700.

Support levels: 1.1571, 1.1541, 1.1500, 1.1450.

Trading scenarios and EUR/USD outlook

Short positions may be opened after a confident breakdown of 1.1571 with a target at 1.1500. Stop-loss at 1.1600. Implementation horizon: 1–2 days.

A rebound from 1.1571 as support followed by a breakout of 1.1600 to the upside may serve as a signal to open new long positions with a target at 1.1668. Stop-loss at 1.1571.