EUR/USD traded at 1.1100 at 17:31 CET on Wednesday, down 0.0056 or 0.50% on the day. It fell as low as 1.1091 and hit an early high of 1.1175. The pair had closed Tuesday at 1.1172. The European Central Bank’s 15:00 UTC reference rate fixed the euro at 1.1127, down 0.78% from the previous fixing. During the U.S. morning the pair fell below 1.11 for the first time since May 2025, down 0.56% on the day. At the same time the U.S. Dollar Index rose 0.6% to 102.86, its highest since October 14.

The 2026 range shows how far the euro has fallen. EUR/USD peaked at 1.2067 this year, and today’s low of 1.1091 is 976 pips, or 8.1%, below that high. The pair averaged 1.1568 from January to October, so it now trades 4.0% below its 2026 average. The previous yearly low was 1.1120 in late October. On October 29, just before the ECB decision, the pair traded at 1.1131 near those lows. Today’s break below 1.1120 sets a new 2026 low. The November high is 1.1274, only 8 sessions old.

The driver is the gap between the two central banks. Tuesday’s U.S. consumer price index rose 0.4% for the month, and core rose 0.3%. Futures now price a December Fed hike at 100%, including an 11.8% chance of 50 basis points. The ECB held its deposit rate at 2.50% on October 29 and signaled a December hike that markets price at 65%, not 100%. When the Fed is expected to raise rates faster and further than the ECB, money moves toward the dollar, and EUR/USD falls.

Europe’s own problems make it worse. Eurozone inflation hit 4.0% in October, the highest since September 2023, while third-quarter growth was 0.4%. French 10-year yields have topped 5%, and the spread over German Bunds reached its widest since the eurozone debt crisis. ECB President Christine Lagarde will leave on February 7, 2027, nine months early. Each of these adds a risk premium to the euro while the dollar benefits from rate repricing.

Other currencies tell the same story. GBP/USD fixed at 1.3307, down 0.86%. USD/CHF jumped 1.12% to 0.8299, and USD/JPY rose 0.67% to 159.23. Every major currency is weaker against the dollar today. The euro’s 0.78% drop at the fixing is in line with sterling’s fall, which points to broad dollar strength rather than a euro-specific shock. That matters for the forecast: when the dollar’s rally fades, the euro should recover, as long as European risks do not widen in the meantime.

U.S. CPI +0.4% and a Fully Priced Fed Hike: Why the Dollar Is Rallying

The October U.S. consumer price index rose 0.4%, above the 0.3% forecast. Core CPI rose 0.3% against a 0.2% forecast, the third monthly beat in a row. Shelter accounted for more than 30% of the increase, and headline inflation slowed from September’s 0.6%. The Bureau of Labor Statistics published no annual rate for October because of gaps from the 2025 shutdown. September’s annual rate was 3.7%.

The dollar’s rally reflects the Fed’s response. The federal funds rate is 3.75% to 4.00% after the September hike, the first since July 2023. At the October 28 FOMC meeting the Fed held rates in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack voting for a hike. Futures now price a December hike at 100%: 88.2% for a quarter point and 11.8% for a half point. Traders expect three more hikes in the cycle, up from two last week.

Fed officials are leaning hawkish. Governor Christopher Waller said a 50-basis-point move should be considered if core CPI came in near 0.3%, and it did. Governor Michelle Bowman said inflation is broadening and more hikes may be needed. Richmond Fed President Tom Barkin preferred to wait. The half-point possibility is what pushed the dollar to its high since October 14, because a 50-basis-point Fed move would widen the gap with the ECB in a single meeting.

U.S. Treasury yields rose sharply. On Tuesday the 2-year jumped 17 basis points, its biggest one-day rise since April 2025. The 10-year rose 15 basis points to 5.015%, and the 30-year reached 5.37%. Today the 10-year is quoted at 4.998%, with cash Treasuries closed for Veterans Day. A 10-year above 5% draws money from euro investors looking for yield. That buying of dollars adds to the pressure on EUR/USD.

The calendar keeps the Fed in control of the dollar. U.S. October producer prices come out Friday, November 13, at 8:30 a.m. ET. The Fed meets December 8–9 and releases new projections. November CPI comes out December 10. The ECB decides on December 17, eight days after the Fed. The Fed moves first, and any surprise from it sets EUR/USD’s level going into the ECB meeting. If the Fed delivers 50 basis points with a higher path for 2027, the ECB would need a hawkish surprise of its own to keep EUR/USD from falling further.

ECB Deposit Rate at 2.50%: A December Hike Priced at 65% Falls Short of the Fed

The ECB kept rates unchanged on October 29. The deposit rate stayed at 2.50%, the main refinancing rate at 2.65% and the marginal lending rate at 2.90%. The hold followed two 25-basis-point hikes earlier in 2026. The latest, in September, was unanimous, and Lagarde called it a “no brainer.” The Governing Council discussed another hike in October and chose to wait for more data before December.

Lagarde’s message was clearly hawkish. She said that unless major developments change the outlook, “the direction of travel is clear.” Markets priced a 13% chance of a hike in October and 65% for December after the meeting. ECB policymaker Fabio Panetta said more hikes may be needed to stop inflation, and Bundesbank President Joachim Nagel has publicly backed a December move. Several forecasts expect a final 25-basis-point hike to a peak of 2.75% in December, with rates held there through 2027.

For EUR/USD, the comparison between the two central banks matters most. The Fed’s range of 3.75%–4.00% has a midpoint of 3.875%, 137.5 basis points above the ECB’s 2.50% deposit rate. If both banks hike 25 basis points in December, the gap stays at 137.5 basis points. If the Fed hikes 50 and the ECB 25, it widens to 162.5. If the Fed hikes and the ECB holds, it widens to 162.5 as well. Every realistic December outcome keeps the gap at 137.5 basis points or wider, and none narrows it.

The difference in pricing explains today’s move. Markets price a December Fed hike at 100% and an ECB hike at 65%. They also expect three more Fed hikes against one more from the ECB. The euro is losing because the market believes the Fed will hike more often and go further. A full reversal would require the ECB to signal more than one more hike, or the Fed to signal fewer.

The ECB’s own calendar is crowded. Its decision on December 17 comes with new staff forecasts. Final October eurozone inflation comes out November 18. Policymakers including Isabel Schnabel, Luis de Guindos and Philip Lane speak in the coming days. Lane has said higher borrowing costs could cool demand and reduce the need for more tightening. If his view gains ground, a December ECB hike would look like the last one, and the euro would lose further.

Eurozone Inflation Hits 4.0%: Energy Drives It While Core Holds at 2.5%

Eurozone inflation rose to 4.0% in October from 3.8% in September, according to Eurostat’s flash estimate. That matched expectations and is the highest since September 2023. Prices rose 0.4% for the month. A year earlier, inflation was just 2.1%. The rate has climbed for four straight months: 1.9% in February, 2.5% in March, 3.2% in August and 3.8% in September.

Energy is driving the jump. Energy prices rose 20.8% from a year earlier in October, reflecting the Iran war and disruptions in the Strait of Hormuz. Core inflation, which excludes energy, food, alcohol and tobacco, held at 2.5%, unchanged and in line with forecasts. Monthly core inflation rose 0.3%, up from 0.2% in September. Inflation excluding energy stayed at 2.3%. The rise is concentrated in energy rather than spreading across the economy.

That shapes ECB policy and the euro. If eurozone core inflation were rising like U.S. core, the ECB would have to match the Fed’s pace. With core steady at 2.5%, the ECB can argue that energy-driven inflation will fade, and that justifies a slower pace of hikes. A slower ECB means a wider rate gap with the Fed and a weaker EUR/USD. The euro area’s relatively contained core inflation is negative for the currency.

Inflation varies widely by country. Belgium’s rate climbed to 5.2% from 4.5%, Spain’s eased to 4.9% from 5.0%, and the Netherlands rose to 3.3% from 3.0%. Germany’s preliminary October CPI was 2.8% against a 3.0% forecast, down from 3.3% in September. Core inflation in Germany fell to 2.1% from 2.4%. Softer German data gives ECB doves more room and adds to the case for a single, final hike in December.

The final October data comes out November 18 and will feed into the ECB’s December forecasts. An upward revision to core would raise the odds of a December ECB hike from 65% and support the euro. Confirmation of 2.5% would keep the gap with the Fed in place. Oil is the other wild card. Brent at $92.70 keeps headline inflation high. A settlement that reopens the Strait of Hormuz would cut eurozone inflation faster than U.S. inflation, because Europe imports more of its energy. That would ease pressure on the ECB to hike.

Eurozone Q3 GDP +0.4%: Spain Grows, France and Italy Stall

The eurozone economy grew 0.4% in the third quarter, beating the 0.2% forecast, according to Eurostat’s preliminary flash estimate. Growth was 0.6% in the second quarter. Compared with a year earlier, GDP rose 1.3%, up from 1.2%. The wider EU grew 0.5% for the quarter and 1.5% for the year. Growth held up despite the energy shock from the Iran war.

The country breakdown shows a split economy. France’s GDP fell 0.1% for the quarter and 0.1% from a year earlier. Italy was flat at 0.0%, after 0.2% in the second quarter. Germany grew 0.2%, and its annual growth of 1.2% was the highest since the third quarter of 2022. Spain grew 0.6%, matched by Estonia and the Netherlands. Ireland’s 5.5% jump was the largest and distorts the total. Lithuania fell 1.0%.

Eurozone growth is good enough to justify a December ECB hike but not strong enough to pull ahead of the U.S. German investment is falling, and German exports have slowed sharply after a strong first half. Weaker exports hurt the euro, since they reduce demand for the currency from foreign buyers of European goods. Germany’s GfK consumer sentiment index sits at -30.8 for November, close to its weakest levels, a sign that households are cutting back as energy prices rise.

France is the biggest weak spot. Its economy is shrinking while its bond yields hit 24-year highs. That combination raises doubts about its finances. A contracting economy collects less tax, which widens the deficit and pushes yields higher. For the euro, France is a source of risk premium that has nothing to do with ECB rates. When that risk flares up, EUR/USD can fall even without any change in rate expectations.

Eurostat publishes its second estimate of third-quarter GDP on November 13, with more detail on spending and employment. Further revisions follow on December 7 and January 19, 2027. A revision down to 0.2% would cut the odds of a December ECB hike and weaken the euro. A confirmation at 0.4% supports the ECB’s case to hike. Growth data matters less for the euro right now than U.S. inflation or French yields, but it affects how confident the ECB is in its next move.

French OATs Above 5%: The Euro Carries a Risk Premium From Paris

French government bonds are the euro’s main domestic risk. On October 22, France’s 10-year yield rose to 5.05%, its highest since July 2002. The spread over German 10-year Bunds widened to 160 basis points, the widest since the eurozone sovereign debt crisis. Another estimate put the spread as high as 174 basis points that day. In early October the spread passed 150 basis points, and France’s debt office announced plans to borrow a record €340 billion next year.

The pressure has built over several months. France’s 10-year yield rose 1.4 percentage points in three months. The quarter ending in September was the worst quarter for French government debt since 1987. The yield is up 162 basis points over 12 months. France’s fiscal watchdog called the government’s budget assumptions “optimistic.” Social unrest and an upcoming presidential election in spring 2027 add political risk. At a press conference, Lagarde said French problems do not meet the threshold for the ECB to step in with its bond-buying backstop.

Lagarde’s departure is tied to France. She will leave on February 7, 2027, nine months before her term ends in October 2027. She said she wanted to speak more freely about politics, and reports said she could no longer stay neutral on the situation in France. Leaving early lets European leaders choose her successor before the French election. For markets it adds uncertainty: a new ECB president takes over in the middle of a hiking cycle and a French fiscal standoff.

This matters for the euro in two ways. A wide French spread signals a risk of the euro area splitting along debt lines, which pushes investors out of euros in general. It also limits the ECB. Every hike raises France’s borrowing costs and could widen the spread further. If French yields rise sharply, the ECB may hold back on hikes, which would widen the gap with the Fed. A calm French market lets the ECB tighten. A stressed French market holds it back.

The spread is now an important gauge for the euro. A narrowing of the OAT-Bund spread toward 120 basis points would ease the risk premium and support a euro rebound toward 1.1290. A widening back above 160 basis points would add downside risk. The French budget debate, credit-rating reviews and any ECB statements about its bond-buying backstop are all events that can move EUR/USD.

Dollar Index at 102.86: The Dollar’s Strength Is Broad

The U.S. Dollar Index rose 0.6% during the day to 102.86, its highest since October 14. It closed Tuesday at 101.70 after a 0.27% decline, then jumped 30 points in a short burst to 101.97 before extending gains. EUR/USD makes up 57.6% of the Dollar Index, so a weak euro accounts for most of the index’s move. Today’s rally is broad, though, and spread across all major currencies.

The other dollar pairs confirm it. USD/JPY rose 0.67% to 159.23 at the fixing, close to the 160 level where Japanese authorities have stepped in before. USD/CHF jumped 1.12% to 0.8299, the biggest move among the majors, as the Swiss franc lost its usual safe-haven support to rising U.S. yields. GBP/USD fell 0.86% to 1.3307. The euro’s 0.78% drop at the fixing was in the middle of the pack, which shows it is not being singled out.

That matters for the forecast. If the euro were falling more than other currencies, the cause would be European, through France, Lagarde or the ECB, and harder to reverse. If it is falling in line, the cause is the dollar and U.S. rates. That kind of move can reverse quickly when U.S. data softens or when the Fed signals that one more hike is enough. Today’s evidence points to dollar strength, which leaves room for a rebound.

The yen is the wild card. Japanese policy rates are at their highest in 31 years. USD/JPY near 160 raises the chance of intervention or a hawkish Bank of Japan surprise. A sharp yen rally would pull the Dollar Index down and lift EUR/USD, even without any European news. EUR/JPY near 176.7 at today’s rates (1.1127 times 159.23) shows the euro holding up better against the yen than against the dollar.

The dollar’s rally depends on U.S. yields. Cash Treasuries are closed today, so futures and currencies are carrying the price moves. When the bond market reopens Thursday, a 10-year yield above 5.015% would push the Dollar Index toward 103.50 and EUR/USD toward 1.1050. A 10-year below 4.90% would bring the Dollar Index back to 102.00 and EUR/USD back to 1.1175. Thursday’s bond reopening is the next key event for the pair.

Oil and Iran: Why Energy Shocks Hurt the Euro More Than the Dollar

Energy hits the eurozone harder than the U.S. December WTI crude traded at $88.18, up 2.49%, and Brent rose 1.32% to $92.70. That followed an Iranian army statement that a tanker struck a mine and caught fire in the Strait of Hormuz. On Tuesday, WTI fell to $86.04, its lowest since August 31, after the U.S. held off on strikes. Earlier in November, Brent fell 9% in one session on hopes for diplomacy.

The eurozone imports most of its oil and gas, while the U.S. is a net energy exporter. When oil rises, Europe’s trade balance worsens: more euros are sold to buy dollar-priced energy, which weighs on the euro. U.S. exporters earn more, which supports the dollar. Higher oil also lifts eurozone headline inflation through energy, now up 20.8%, more directly than it lifts U.S. core inflation. That pushes the ECB toward hikes it would rather not make in a slowing economy.

That tension shows up in growth expectations. Lagarde has said risks to inflation lean higher and risks to growth lean lower. Higher energy prices push the ECB toward tightening into weakness, with France shrinking, Italy flat and German exports slowing. Markets know an ECB hiking into weak growth can only go so far. So even when energy pushes eurozone inflation higher, the euro often falls, because markets doubt the ECB can keep hiking.

An Iran deal would help the euro most. A settlement that reopens the Strait of Hormuz would lower oil prices, improve Europe’s trade balance, ease energy inflation and reduce the pressure on the ECB. Lower oil would also ease U.S. inflation and might soften the Fed’s path. The net effect would favor the euro, because Europe is more exposed to energy. On Monday, when oil fell on comments from President Trump, the dollar weakened across the board.

Escalation would do the reverse. Brent above $100 would push EUR/USD toward 1.1050 and possibly 1.1000, because the trade effect and weaker growth outlook would outweigh any boost to ECB hike pricing. For the forecast, oil is a factor that pushes the euro in the same direction as Fed pricing. Lower oil and fewer expected Fed hikes together would mean the fastest path back to 1.1290.

Rate Spreads and Capital Flows: Why Money Is Moving to the Dollar

Money is flowing toward higher yields. The U.S. 10-year yields 4.998%, and the 30-year yields 5.37%. In Europe, Germany’s 10-year Bund is far below those levels, and France’s is above 5% only because of its fiscal problems. A euro investor can earn more in U.S. Treasuries than in German Bunds, with the dollar’s added appeal while the Fed keeps hiking.

The gap in short-term rates matters even more for currency traders. The U.S. 2-year jumped 17 basis points on Tuesday on Fed repricing. Euro short-term rates did not move nearly as much, because the ECB’s path is flatter. A wider 2-year gap makes it more profitable to hold dollars, earning the U.S. rate, against euros, earning the lower euro rate. That rewards traders who are short EUR/USD and penalizes those who are long, which keeps steady pressure on the pair.

Money is also moving within the euro area. Investors leaving French bonds can buy German Bunds or U.S. Treasuries. Money moving into Bunds stays in euros and does not hurt the currency. Money moving into Treasuries leaves the euro. With U.S. 10-year yields near 5%, more of that money is going across the Atlantic. That outflow adds to the selling of euros.

Gold flows show the same pattern. North American gold funds lost $512 million in October, while European funds took in $1.8 billion. European investors are buying gold as protection against Middle East risk and government debt worries, and those purchases are priced in dollars. Some of that hedging means selling euros. Europe’s demand for safe assets is going partly into dollar-priced assets, which adds to dollar demand.

The trend in rate spreads favors the dollar until the Fed’s hiking pace slows. The key indicator is the gap between U.S. and German 2-year yields. If it starts to narrow, with the Fed signaling a pause or the ECB signaling more than one hike, EUR/USD will rise. If it widens, the pair falls. Tuesday’s 17-basis-point jump in the U.S. 2-year widened the gap and explains the move from 1.1172 to 1.1091.

Positioning: EUR/USD Has Fallen From 1.17 Without Becoming Oversold

EUR/USD has dropped sharply from levels above 1.1700, according to technical assessments. It now sits just above its main long-term support. One trend score puts the pair at 30 out of 100, showing heavy short-term damage, with price below a series of falling moving averages. The 20-day average sits near 1.1214, the 50-day near 1.1332 and the 200-day near 1.1540. The pair trades below all three, and the 20-day is below the 50-day, which confirms the downtrend.

Momentum is weak but not extreme. The daily relative strength index reads 47.9 on the fixing table, neutral rather than oversold. The pair has slid gradually rather than collapsed, so sellers have not exhausted themselves. That leaves room for a further drop before a reliable bottom forms, and it argues against buying aggressively at 1.1100.

The year’s lows define the structure. The 2026 low before today was 1.1120, and today’s break to 1.1091 sets a new one. Near-term support sits between 1.1088 and 1.1126, with 1.1104 as the next short-term target and 1.1111 as a base level. A daily close below 1.1088 would expose 1.1050 and then 1.1000, a round number last tested in spring 2025.

Resistance comes in layers. The first is 1.1175, today’s high and close to Tuesday’s 1.1172 close. Next is the 20-day average at 1.1214, then the 1.1227 to 1.1290 band. The November high at 1.1274 sits inside that band. A daily close above 1.1290 would be the first sign that the decline from 1.17 is over, and it would put the 50-day average at 1.1332 in play.

The positioning picture is negative but not crowded. The decline has been steady rather than panicked, so the market has not loaded up on short euro positions that could unwind sharply. That limits the chance of a sudden short squeeze and suggests any recovery will be slow. A sharp rebound would most likely come from a Fed surprise, such as a softer December statement, or from an Iran settlement that cuts oil prices.

Calendar: U.S. PPI, Eurozone GDP, Final HICP, the Fed and the ECB

The schedule over the next five weeks will decide where EUR/USD goes. U.S. cash Treasuries reopen Thursday after Veterans Day, and weekly jobless claims come out at 8:30 a.m. ET. Eurostat’s second third-quarter GDP estimate follows on Friday at 11:00 CET. U.S. producer prices come out the same day at 8:30 a.m. ET. These are the first tests of whether Tuesday’s dollar rally holds.

ECB officials will speak throughout the week. Isabel Schnabel, Luis de Guindos and Philip Lane all have scheduled appearances, and Lagarde attends the Eurogroup meeting. Schnabel has generally favored tighter policy, and Lane has pointed to the risk of hiking into weak demand. The balance of their comments will move ECB December pricing from its current 65%. Comments pointing to more than one hike would support the euro, while signals that December is the last hike would weigh on it.

November 18 brings the final October eurozone inflation data, the last input to the ECB’s December forecasts. Before that, the U.S. calendar has Nvidia earnings on November 17 and Thanksgiving on November 26, which will thin trading. Trading volume tends to fall in the last two weeks of November. That can make moves bigger in both directions, especially around the month-end rebalancing on November 30.

December holds the main events. The Fed meets December 8–9 and releases new projections and a dot plot. U.S. November CPI comes out December 10. The ECB decides on December 17 with new staff forecasts. The order matters: the Fed sets the dollar’s direction first, and the ECB reacts eight days later. A 50-basis-point Fed hike with a higher 2027 path would push EUR/USD toward 1.1000 before the ECB meets. A quarter-point Fed hike with signs of a peak would let the euro rebuild toward 1.1290 before the ECB.

Beyond December, the euro’s outlook depends on Lagarde’s successor, the French election in spring 2027 and how long energy prices stay high. Those are longer-term issues. In the next five weeks, the gap between Fed and ECB rate pricing decides where EUR/USD goes.

Technical Map: 1.1088 Support, 1.1175 Pivot, 1.1290 Upside Target

EUR/USD’s short-term structure is bearish. The pair broke below 1.1120, the previous 2026 low, and the 1.11 level, the first move below it since May 2025. The session ranged from 1.1091 to 1.1175, a span of 84 pips. Price trades below the 20-day average at 1.1214, the 50-day at 1.1332 and the 200-day at 1.1540. The downtrend from 1.1700 is intact.

The first support zone is 1.1088 to 1.1104, around today’s low. Below it, 1.1050 is the next level, followed by 1.1000. A daily close below 1.1088 would confirm the break and target 1.1050 within days, 50 pips or 0.45% below the current price. A move to 1.1000 would need U.S. yields above 5.05%, Brent above $100 or the French spread back above 160 basis points.

The key pivot is 1.1175, today’s high and close to Tuesday’s 1.1172 close. Getting back above 1.1175 would reverse today’s breakdown and suggest the drop below 1.11 was a false move. Above that, the 20-day average at 1.1214 and the 1.1227 resistance mark the first serious test. The November high at 1.1274 and the top of the resistance band at 1.1290 complete the near-term ceiling.

The upside target is 1.1290, 190 pips or 1.71% above 1.1100. Reaching it would need three things: a softer U.S. data run through Friday’s PPI that eases the 50-basis-point Fed risk; stronger ECB signals that lift December hike odds from 65%; and a steady or narrowing French spread. A daily close above 1.1290 would open the 50-day average at 1.1332, and beyond that the start of the 1.1400 range.

The risk-reward depends on direction. At 1.1100, downside to 1.1050 is 50 pips and upside to 1.1290 is 190 pips. That looks attractive for buyers, but only with confirmation, because the trend is down and momentum is not yet oversold. A close back above 1.1175 is the signal that shifts the odds toward the target. Without it, rallies are likely to be sold below 1.1214.

EUR/USD Forecast Verdict: Bearish Near Term, 1.1290 Upside Target Once 1.1175 Is Reclaimed

The bearish case has the advantage today. Futures price a December Fed hike at 100%, with an 11.8% chance of 50 basis points. The ECB is priced at 65% for a hike. Traders expect three more Fed hikes against one more from the ECB. The policy rate gap is 137.5 basis points and every realistic December outcome keeps it there or widens it. The U.S. 10-year yields 4.998%, the 2-year jumped 17 basis points on Tuesday, and the Dollar Index sits at 102.86, its highest since October 14. EUR/USD has broken below 1.11 for the first time since May 2025.

Europe adds its own risks. Inflation is 4.0% and driven by energy, while core holds at 2.5%. That limits how far the ECB will hike. France’s economy shrank 0.1% while its 10-year yield hit 5.05% and its spread over Bunds reached 160 basis points. Lagarde leaves early on February 7, 2027. Brent at $92.70 hurts Europe’s trade balance more than America’s. Each factor supports the dollar or weighs on the euro.

The bullish case is about timing and scope. Today’s move is broad dollar strength across every major currency, not a euro-specific collapse, and moves like that tend to reverse once U.S. rate pricing peaks. Eurozone growth beat forecasts at 0.4%. The ECB is still hiking. An Iran settlement would favor the euro because Europe is more exposed to energy. The pair’s RSI of 47.9 is neutral, and positioning is not crowded on the short side. A softer U.S. PPI on Friday or a Fed that signals one more hike is enough could trigger a sharp short-covering rally.

The near-term range is 1.1050 to 1.1214, with 1.1175 as the dividing line. Below 1.1175 the trend stays down, and a daily close below 1.1088 targets 1.1050 and then 1.1000. Above 1.1175 the breakdown is reversed, and the pair opens toward 1.1214, 1.1274 and the 1.1290 target.

The forecast is bearish in the near term while EUR/USD stays below 1.1175. The upside target is 1.1290, 1.71% above the current price, once 1.1175 is reclaimed. That needs U.S. yields to ease from 5%, ECB hike odds to rise above 65% and the French spread to stay stable. The Fed’s December 9 decision is the main catalyst, and the ECB’s December 17 response decides whether the euro can recover toward its 1.1568 average for 2026.

That’s TradingNEWS