FX.co ★ EUR/USD

The euro is on the back foot near 1.1090, and the pressure is coming almost entirely from the other side of the Atlantic. October’s US inflation report delivered exactly the kind of upside surprise that Federal Reserve Governor Christopher Waller had spent the previous 24 hours warning about. Headline CPI rose 0.4% month-on-month against a 0.3% consensus, while core inflation climbed 0.3% for a third consecutive month, beating forecasts of 0.2%. The annual figures were never published; last autumn’s government shutdown meant October 2025 prices were simply never collected, so markets were forced to trade the monthly detail alone, and they did not like what they saw. Waller had already said that hiking only 25 basis points in December would “put our credibility at risk,” and that a core reading at 0.3% or above could justify a half-point move. The data validated that warning. Futures now assign roughly an 88.5% probability to a quarter-point increase on December 8–9 and about 11.5% to a 50-basis-point move, with three additional quarter-point hikes priced in by mid-2027. The dollar index has pushed to around 102.70, closing in on its year-to-date high of 102.94. MUFG’s team argues the repricing has been driven less by the CPI print itself and more by Waller’s pre-data comments, and they warn that a genuine 50-basis-point outcome would “prompt a further lurch lower in EUR/USD” and bring levels below 1.1000 into play. Against that, the euro’s own story is respectable but outgunned. The ECB held rates at its October 29 meeting, leaving the deposit rate at 2.50%, and all 71 economists surveyed by Reuters expect a December hike to 2.75%, a move that would lift rates above the ECB’s estimated neutral band of 1.75%–2.50%. Eurozone inflation hit 4% in October, its highest in three years, yet the currency is not trading the rate story. Persistent French political and fiscal uncertainty, combined with questions over Christine Lagarde’s early departure, is capping any rebound. Hopes for a US-Iran diplomatic resolution are also limiting safe-haven demand for the dollar, which has prevented an even sharper decline.

On the charts, EUR/USD at 1.1090 sits beneath all four tracked moving averages, and the way they are layered explains the persistence of this decline. Read each average separately. The H1 50-period SMA at 1.1125 is the nearest obstacle, roughly 35 pips overhead, and it is the first gate any rebound must clear. Above it, the H4 50-period SMA and the H1 200-period SMA both read 1.1186, an exact convergence that turns them into a single reinforced resistance band rather than two separate lines. When two timeframes settle on an identical number, the market tends to defend the zone collectively, and that 1.1186 level is the decisive ceiling, a full 96 pips above current price. Highest of all sits the H4 200-period SMA at 1.1211, representing full structural repair rather than a corrective bounce. Separately from those dynamic averages, horizontal support and resistance mark the fixed zones where traders have actually left orders behind. On the downside, the first shelf is 1.1050, followed by the psychologically significant 1.1000, a round number where buyers have historically appeared, then 1.0950, with 1.0900 marking a deeper demand area. On the upside, resistance begins at 1.1125, then the 1.1186 convergence, followed by 1.1211 and the round 1.1250, with 1.1300 beyond. Two paths are worth mapping. If buyers reclaim 1.1125 and push through 1.1186, the pair could extend toward 1.1211, and then 1.1250, and a daily close above that band would be the first honest evidence the post-CPI slide has stalled. If 1.1050 gives way under sustained selling, expect a slide toward 1.1000 and then 1.0950, which would leave every average firmly overhead. The bias stays bearish while price trades beneath the full stack, and with roughly 40 pips to first support against 35 to first resistance, the near-term picture rests entirely on whether the dollar’s historic repricing pauses for breath or the euro finds a catalyst of its own.