EUR/USD Rises as Traders React to Germany’s Inflation Data

As expected, the Consumer Price Index held steady at 2.4% year-over-year and rose by 0.2% month-over-month. These figures complement the wholesale price data released earlier and indicate stable inflation in the eurozone’s largest economy. In September, wholesale prices accelerated from 0.7% to 1.2% year-over-year and from –0.6% to 0.2% month-over-month — a trend that could lead to higher consumer prices across the region. Still, most European Central Bank (ECB) officials believe inflation remains close to the 2% target, suggesting no further policy tightening is likely this year. Meanwhile, the EU economy continues to slow amid deteriorating consumer sentiment, rising living costs, weaker social support, and growing political instability — as seen in France.

Earlier this month, French Prime Minister Sébastien Lecornu resigned before finalizing the formation of his cabinet, only to be reappointed by President Emmanuel Macron days later. The move offered temporary support to the euro, though analysts doubt it will bring any meaningful political or economic changes. Macron, however, expressed optimism that the government will soon reach a consensus on the 2026 budget.

At the same time, the U.S. dollar remains under pressure amid expectations of a Federal Reserve rate cut in October and the ongoing government shutdown. The White House continues implementing planned layoffs of federal employees, raising the risk of new legal disputes and labor union protests.

Support and Resistance Levels

Bollinger Bands on the daily chart show a moderate downward slope, with the price range expanding from below — giving bears room for new local lows. MACD is falling, maintaining a sell signal as the histogram remains below the signal line. In contrast, the Stochastic indicator is edging higher from oversold territory, hinting at short-term rebound potential for the euro.

Resistance levels: 1.1629, 1.1700, 1.1754, 1.1800.

Support levels: 1.1541, 1.1500, 1.1450, 1.1400.

Trading Scenarios and EUR/USD Forecast

Long positions may be opened after a confident breakout above 1.1629 with a target at 1.1754 and a stop loss at 1.1580. Implementation period: 2–3 days.

A return to bearish momentum with a breakout below 1.1541 could serve as a signal for new short positions targeting 1.1450. Stop loss — 1.1590.