EUR/USD Forecast 2026: ECB vs Fed Desk Read
The eur usd forecast hinges on the ECB versus Fed rate gap and relative growth. EUR/USD trades at 1.1246, with 1.1202 the nearest level the market has defended. Ken’s desk note for this session has not published yet, so the read below is the standing framework and an automated levels scan, not today’s desk view. Live levels and scenarios are below.
Want to build this read yourself? See the Macro Trading Blueprint
Ken’s Take. The euro is about 1.1236, flat on Tuesday’s close of 1.1235, still capped beneath 1.1260. Ken’s video for today is on this page. On oil, he notes Tuesday’s swing: Brent was sold on reports of a United States and Iran peace deal, then pushed back up as Washington called a deal extremely difficult, and in his view the war is likely to continue beyond the midterm elections, which keeps fuel prices and inflation sticky. On the euro, Ken is in two minds while it consolidates. He would still like to see the dollar correction carry it up toward 1.14 to 1.1415 as a detour: accumulation, then a manipulation higher, then distribution and the ultimate move to the downside. The euro has bounced from this zone many times, and there is reason for a dollar pullback, but he is clear that this does not mean the bigger dollar uptrend is over.
What changed. Three markets priced the same oil shock three different ways today. In London it was inflation: UK consumer prices rose to 3.5 per cent in September from 3.1, above the 3.4 expected, with core at 2.8 and services at 3.7, and markets now price a Bank of England hike on 5 November at about 95 per cent. In Paris it was credibility: the French 10 year yield went through 5 per cent for the first time since 2002 and the gap to Germany widened to about 157 to 160 basis points, while German bonds were bought. In New York it was growth: housing starts fell 5.2 per cent on Tuesday and the 10 year Treasury yield has slipped to about 5.11 per cent from 5.15 on Monday, all of it a fall in real yields, with inflation expectations flat. Brent touched 111.99 dollars on Tuesday, settled at 108.79 on unconfirmed reports of renewed Iran talks and is back near 110 to 111 today, with more tankers hit near Hormuz. Federal Reserve pricing is unchanged: about 83 per cent for a hold next week and about 94 per cent for a hike by December. For the euro the French story matters most: Tuesday’s National Assembly vote on the revenue side of the 2027 budget did not reassure investors, protests have brought curfews in Paris and Nice, and Moody’s reviews France on Friday. The European Central Bank is expected to hold on 29 October; markets have priced out an October hike.
Main driver. Imported inflation and sovereign credibility. Euro area inflation is 3.8 per cent but most of it is energy, and Europe pays for energy that the United States sells, so hikes are a tax on growth rather than a reason to buy the currency. France is the new weight: the French 10 year above 5 per cent is a credibility premium, and it is part of why the European Central Bank has backed away from October. The euro is holding up because the dollar side is soft, not because of anything European.
What the desk is watching. Whether France stays a French problem. So far German bonds are being bought as French bonds are sold, and the euro is still above its lows. If German yields start rising with French yields, the market is pricing a euro area problem and the euro is exposed. Friday has two tests: the flash surveys at about 09:00 and Moody’s late in the day. A peace headline on Hormuz is the main upside risk: lower oil helps Europe’s terms of trade more than anyone’s.
Key liquidity areas. Overhead, sellers are protected above the 1.1259 to 1.1260 highs from 19 and 20 October and the 20 day average at 1.1260, then above the 16 October high at 1.1269, then above the 2 October high at 1.1286. Beneath, the pools sit under today’s 1.1214 and Tuesday’s 1.1205, then under Monday’s 1.1178, then under the 1.1150 to 1.1153 shelf, then under the 2026 low at 1.1114 from 14 October.
Key levels. Resistance begins at 1.1259 to 1.1269 which is the 16, 19 and 20 October highs with the 20 day average at 1.1260, then 1.1286 which is the 2 October high, then 1.1456 to 1.1462 which is the 50 day and 100 day averages. Support begins at 1.1205 to 1.1214 which is today’s and Tuesday’s lows, then 1.1178 which is Monday’s low, then 1.1150 to 1.1153, then 1.1114 which is the 2026 low, then 1.0900 and 1.0850 which are Ken’s downside liquidity areas.
Key technical levels. A floor with a lid. The euro swept to a 2026 low of 1.1114 on 14 October, has rebuilt above 1.12 since, and has been capped three days running between 1.1259 and 1.1269 with the 20 day average at 1.1260 sitting right on that lid. The longer averages are well above price and falling: the 50 day at 1.1456, the 100 day at 1.1462 and the 200 day at 1.1579. A daily close above 1.1286 would break the lower high sequence from early October; a close beneath 1.1150 puts the 2026 low back in play.
What would invalidate the view. The bearish structure stays valid while the euro holds beneath 1.1286 on a daily close, with 1.1150, 1.1114 and then 1.09 as the objectives; the clean version is a Moody’s downgrade, German yields rising with French ones and oil higher. A daily close above 1.1286 invalidates the bearish structure and opens the averages near 1.1456; the clean version of that is a credible Hormuz deal with oil sharply lower and French spreads tighter.
Data and event risk. Wednesday 21 October: the United States 20 year bond auction at 18:00 London, then Tesla and Meta results after the United States close. Thursday 22 October: United States jobless claims at 13:30 and a 5 year inflation protected Treasury auction at 18:00. Friday 23 October: Japan national consumer prices at 00:30, flash purchasing managers surveys for the euro area around 09:00, the UK around 09:30 and the United States around 14:45, the final University of Michigan survey with inflation expectations at 15:00, and Moody’s review of France late in the day. UK clocks go back on Sunday 25 October. Wednesday 28 October brings the UK Budget and the Federal Reserve decision at 18:00 London; the European Central Bank decides on 29 October, the Bank of Japan on 30 October and the Bank of England on 5 November.
Educational only, not financial advice. The note above is the desk’s read on the date shown. Trading is leveraged and most retail accounts lose money.
Cross-asset tape reads mixed (dollar bias neutral, vol elevated). Driver in the feed: “Russia carries out ‘massive strike’ overnight on port infrastructure facilities.” (Financial Juice).
| 1.1250 | daily pivot P + 21 EMA H4 + prior day high |
| 1.1451 | round 1.145 + 50 SMA daily |
| 1.1202 | prior week low + pivot S3 + round 1.12 |
Levels from the desk’s six lens confluence scan, refreshed each session. Positioning structure, not a trade instruction. Trading carries risk; most retail accounts lose money.
What actually moves EUR/USD
EUR/USD is the world’s most traded pair and at heart it is a rate differential story. The euro tends to firm against the dollar when the market expects the European Central Bank to hold rates higher relative to the Federal Reserve, and it tends to soften when the Fed is expected to stay tighter for longer. That is why the pair reacts so sharply to inflation prints and central bank meetings on both sides of the Atlantic: each one reprices the gap between the two policy paths.
Relative growth and risk appetite layer on top. A stronger euro area growth surprise narrows the gap the market expects and supports the euro. Broad dollar strength in a risk off episode can override the rate story for a while, since the dollar is the world’s haven. The desk reads EUR/USD as the ECB path minus the Fed path, adjusted for who is growing and where global risk appetite sits.
How the desk reads the chart
EUR/USD respects clean horizontal structure and the big round figures, which makes the level map below the spine of the read. The near term bias stays constructive for the euro while price holds its nearest defended support and prints higher lows; it turns heavy when a support that held repeatedly breaks on a closing basis. The named levels are drawn from a six lens confluence scan, prior day and weekly extremes, round numbers, moving averages, pivots and the volume point of control, rather than from a single indicator.
This is positioning structure, not a trade signal. It shows where the market has defended price so you can build your own plan and risk around it.
Frequently asked questions
What is the EUR/USD forecast right now?
The live read at the top of this page is refreshed every session with the current EUR/USD rate, the day’s move and the nearest support and resistance from the desk’s level scan. Direction hinges on the ECB versus Fed rate gap: when the market expects the ECB to stay relatively tighter, the euro tends to firm, and the reverse when the Fed is expected to hold higher for longer.
What drives EUR/USD?
EUR/USD is mainly a rate differential trade. The euro firms when the European Central Bank is expected to hold rates higher relative to the Federal Reserve, and softens when the Fed is expected to stay tighter. Relative growth surprises and global risk appetite layer on top, with the dollar’s haven status able to override the rate story during risk off episodes.
Will EUR/USD go up in 2026?
That depends on the path of the rate gap. If the Fed eases faster than the ECB, the differential narrows in the euro’s favour and EUR/USD tends to grind higher. If the Fed holds while the ECB cuts, the dollar tends to win. The desk tracks both central bank paths and frames bias by structure rather than a fixed year end target.
What are the key levels for EUR/USD?
The named levels card above lists the current support and resistance zones, each from a six lens confluence scan and tagged with why it matters, for example a prior weekly high or a round figure. The levels refresh every session as structure shifts, so the page always shows the live map.
Is EUR/USD a buy at current levels?
The desk does not post buy or sell instructions here. It posts the structure: where the rate sits versus defended support and overhead resistance and what would flip the near term bias. Use that to frame your own plan and risk. Trading carries risk and most retail accounts lose money.
One to one mentorship with Ken. How a desk actually builds a view, sizes it and survives being wrong. Applications are open. Apply here
Rehearse the scenario before the data does it for you. I work with E8 Markets because I want traders thinking in process, defined risk and execution rather than chasing headlines. E8 runs structured simulated trading programmes including forex, and the E8 Terminal carries Perpetual Futures on a real time Hyperliquid data feed for supported crypto, stocks, indices and metals. Open an E8 Markets account
Use code KENMACRO at checkout, then validate it to see the live price for the product you actually pick.
Partner link. E8 Markets provides simulated trading environments, not live brokerage accounts. Promotions differ by product and change over time, so validate the code at checkout and read the final price before you buy rather than trusting any percentage quoted elsewhere.
EUR/USD turns on the ECB versus Fed path. The free KenMacro framework is the same risk-first, macro-aware approach behind this desk view, built so you can apply it to your own trading.
More from the desk: US dollar outlook · world interest rates
Continue reading
From the desk
Part of the Dollar and DXY Forecast hub, the desk’s living guide, kept current as markets move.