Rabobank prepares revised EUR/USD forecasts as energy exposure and French fiscal risks undermine the Euro’s appeal despite ECB tightening.

Rabobank is preparing to give greater weight to Dollar resilience in its EUR/USD forecasts, arguing that Europe’s own weaknesses have helped sustain the US currency’s advance.

The Euro to US Dollar exchange rate traded around 1.1308 on Thursday, down 0.17% from Wednesday’s close, following a 2.50% decline during September.

The bank plans to publish revised projections on Friday, 2 October, after its below-consensus forecasts converged with market expectations.

“We will be looking to publish revised forecasts for EUR/USD tomorrow with more emphasis on USD resilience.”

Rabobank attributes much of the Dollar’s summer strength to the reversal from expectations of Federal Reserve cuts to rate increases.

But higher European interest rates have failed to deliver comparable support for the Euro.

“Even though the ECB brought forward its tightening cycle, and despite the resilience of the Eurozone economy this year, the market is concerned about growth risks in view of the Eurozone’s position as an energy importer.”

Investors entered the Iran war with bullish Euro positions, encouraged by Germany’s plans to expand defence and infrastructure spending.

Rabobank says those positions were rapidly unwound as the conflict began.

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France’s fiscal difficulties add to the problem, with public debt reaching 119% of GDP at the end of June ahead of its contentious 2027 Budget.

However, Rabobank cautions against treating French bond-market stress as automatic selling pressure on the Euro.

“To date, French budget woes have not had a significant impact on the single currency since sellers of French bonds have been content to roll into other EUR denominated paper.”

The broader concern is that energy costs, political uncertainty and competitive pressure from China reduce the Euro’s attraction as an alternative to the Dollar.

Friday’s forecast update will show how far Rabobank translates that assessment into revised exchange-rate targets.

Our currency coverage draws on live market data, official economic releases and published bank research.

Created on October 01, 2026

• The EUR/JPY pair fell early on Wednesday, as we broke below a significant support level in the form of 178 yen.

• However, it looks like the buyers are returning.

The euro dropped a bit during the early part of the trading session against the Japanese yen, threatening the ¥178 level, but it has turned around to show a bit of a hammer. The hammer suggests that the ¥178 level is likely to continue to be a bit of a floor.

The 181 yen level above has been resistance lately

The ¥181 level above has been resistance lately, and it is worth noting that the interest rate differential continues to favor the European Union. The Japanese, I think, are basically in a situation where they cannot raise rates anytime soon, at least not easily, because of the massive amount of debt that country has.

We have seen some interventions by the Bank of Japan, but I think those are basically to slow the market down. It is not really a situation where they plan on turning things around. Another thing that could come into play is if we get a bit of a situation where energy really flows into the European Union, that releases some of the concerns and could have this market rolling from here.

The market breaking down below the low of the Wednesday trading session then opens up a drop down to the ¥176 level, maybe the ¥175 level. Ultimately, I like buying dips in the Japanese yen-related pairs and collecting the swap at the end of every day. I am still a carry trader despite the interventions, although I am the first to admit I am much more comfortable going against the franc than the yen. But this is still essentially the same setup.

Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

U.S. Dollar Index rallied as traders focused on ISM Manufacturing PMI report. The report indicated that ISM Manufacturing PMI decreased from 54.6 in August to 54.5 in September, compared to analyst forecast of 55. Numbers above 50 show expansion. The report missed analyst expectations but showed that U.S. economy remained in great shape, which was bullish for the American currency.

Traders also focused on the Initial Jobless Claims report. The report showed that 197,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 200,000.

Created on October 01, 2026

• The U.S. dollar has fallen against the Japanese yen during trading on Wednesday as we continue to see a lot of volatility in the bond markets.

• Quite frankly, part of what we are seeing is a situation where traders are looking to see whether or not the Federal Reserve will have to continue hiking rates.

The fact that the core PCE numbers came out lower than anticipated does suggest that maybe the Federal Reserve may not have to be as aggressive as once feared. That being said, I only read so much into that, and I recognize that traders will continue to see this as a market that remains held hostage by interest-rate expectations out of the United States, along with energy inflation, which has a lot to do with that as well. Then, of course, there is the Bank of Japan and whether or not they are going to get involved in the market.

Previous intervention

The recent USD/JPY action that we had seen coming from Japan intervening in the currency market to save the Japanese yen has rattled the market, but now we find ourselves sitting just below the 200-day EMA and the 50-day EMA near the ¥158 level. With that being said, I like the idea of taking advantage of short-term dips to continue to buy into this market, as we see a lot of upward pressure on the U.S. dollar from the longer-term standpoint.

But perhaps more importantly, we have a situation where the Japanese will be hard-pressed to truly hike rates with any type of seriousness over the next several months, if not years. After all, the debt levels in Japan are historically bad, and they are only getting worse. It becomes very difficult to finance those debts at those extraordinarily high levels.

So, with that being said, I still favor going against the Japanese yen, although I do recognize that there could be some problems along the way.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

The EUR/USD is currently at 1.1301 on the 2 hour chart. I see that the pair broke 1.1312 support. Below the support, I see no major support until 1.1283. Once that level is broken, then support is located at 1.1256, and 1.1230.

From the recent movement of EUR/USD, the pair has formed a series of lower highs and lower lows. Because of this, the overall trend is down. A break of 1.1283 changes the trend to up, and then 1.1312 is the first major resistance.

The first support I am watching is 1.1283. Expect 1.1256 below. Limit orders to buy are now filled at 1.1312, above which 1.1350 and 1.1373 become key levels.

RSI is near the 30 level and is in the bearish territory, signaling that further declines may be limited. I am bearish and expect downside to the 1.1312/50 area, which is reinforced by a lower trendline, and a bearish channel. A move above the 1.1373 area changes the near-term bias. I shall wait for a break below 1.1283 for another target at 1.1256.

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