EUR/USD is around 1.1238 on the 1 hour chart. What stands out to me is the strong recovery from 1.1113 with rising trendline support and higher lows. EUR/USD has also moved above the 1.1201 to 1.1221 resistance zone and is also above both moving averages, suggesting the bulls are in control.
I am looking at 1.1277, the high from earlier in the month, as the first serious resistance. The 1.1221 level is the first support and is followed by 1.1201 and the rising trendline. Below the trendline and 1.1201, 1.1153 and 1.1113 come into play.
RSI is near 64 and is above its signal line at 59. This tells me that the EUR/USD is in positive territory and trending up, but not to the extent that it is overbought. I am bullish while EUR/USD stays above 1.1201. Should we see a close back below 1.1201, it would call into question the breakout. A move above 1.1277 would confirm and add to the upside recovery.
The GBPJPY pair renewed its bullish corrective attempts, taking advantage of its repeated stability above the additional support level at 208.10, alongside the positive momentum provided by the Stochastic indicator. The pair is currently trading near its previously anticipated target at 210.40.
Note that the current divergence among the main indicators may push the price into mixed sideways trading, with a possibility of forming bearish waves that could target 209.60 and 209.00. However, a successful break above 210.40 and stability above this level would enable the pair to resume its corrective advance and attempt to test the main resistance barrier near 211.20.
The expected trading range for today is between 209.00 and 210.55.
Higher-than-expected PPI report did not have any impact on the Treasury market today as traders rushed to buy safe-haven bonds amid AI uncertainty. PPI increased by +1.3% month-over-month in September, highlighting growing inflationary pressure.
FedWatch Tool indicates that the probability for a rate hike at the next Fed meeting in October declined to 29.3%. Traders believe that Fed will not raise rates despite inflation data. The falling probability of a rate hike provided additional support to gold markets.
U.S. dollar pulled back against a broad basket of currencies as traders reacted to the rally in U.S. bond markets. Weaker dollar served as an additional positive catalyst for gold.
Currently, gold is trying to settle back above the resistance level at $4160 – $4180. In case gold manages to settle above the $4180 level, it will head towards the resistance, which is located in the $4300 – $4320 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
PPI increased by +1.3% month-over-month in September, while analysts expected that it would grow by +0.5%.
Traders also had a chance to take a look at the Initial Jobless Claims report. The report showed that 199,000 Americans filed for unemployment benefits in a week, mostly in line with the analyst forecast of 200,000.
The strong pullback in Treasury yields served as a negative catalyst for the American currency. Treasury yields moved lower as traders rushed to buy bonds amid sell-off in AI stocks.
In case U.S. Dollar Index settles below the 101.90 level, it will head towards the nearest support, which is located in the 101.50 – 101.65 range. On the upside, a successful test of the resistance at 102.35 – 102.50 will open the way to the test of the next resistance level at 103.15 – 103.30.
For now, a confirmed breakout above $3.396 and then $3.41, could see the 127.2% Fibonacci ABCD projection reached at $3.548. But the first more significance level is defined by the 127.2% Fibonacci extension of the prior decline near $3.61. A key concern now will be the characteristics of further consolidation or weakness before a new high breakout signals, if that is what occurs.
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EUR/USD Price Outlook: Euro Holds Near 1.12 After US PPI Jump
The Euro could stabilise against the US Dollar after finding support near 1.11, Scotiabank says, although its short-term assessment remains cautious.
Foreign exchange analysts at Scotiabank see a possible base forming beneath EUR/USD after Wednesday’s sell-off, but resistance at 1.1240-1.1250 still stands above the recovering Euro.
EUR/USD traded near 1.1203 on Thursday afternoon, little changed from Wednesday’s close, after briefly dipping below 1.12 following the latest US data.
Scotiabank described the earlier rebound: “The EUR rose close to a cent from yesterday’s intraday low through overnight trade, peaking near 1.1240 before easing back modestly.”
“Eurozone data were largely ignored (weaker than expected August Industrial Production) as markets adjusted to volatile yield and spread movement.”
In that assessment, the bank added: “Front-end EZ/US spreads have moved sharply back and forth over the past 24 hours but are now little changed from levels prevailing ahead of yesterday’s US CPI report.”
These short-dated yield gaps reflect relative interest-rate expectations, which influence the returns available on Euro and Dollar assets.
View full sizeImage: EUR/USD intraday chart after US PPI data release.
Oversold Euro (EUR) meets another inflation test
Thursday’s US producer-price report added to inflation concerns, recording a 1.3% monthly increase.
The Bureau of Labor Statistics said: “The September increase is the largest advance since rising 1.7 percent in March 2022.”
Scotiabank retains a neutral-to-bearish short-term assessment: “Bearish pressure on the EUR extended yesterday but losses were short-lived. Losses based in the low 1.11- right on the 50% retracement of the EUR’s 2025/26 rally from the low 1.01 area.”
The retracement marks the loss of half that earlier advance, rather than a 50% fall in the exchange rate.
Scotiabank says: “This may be significant and provide a platform for a heavily oversold EUR to stabilize or recover.”
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EUR/USD exchange rate FAQs
Is Scotiabank bullish on EUR/USD?
Its short-term assessment remains neutral-to-bearish, although it sees scope for stabilisation or recovery.
Where is the bank’s resistance level?
Scotiabank identifies resistance between 1.1240 and 1.1250.
Is 1.11 a forecast target?
No. It is the area where the bank identifies potential support following the recent decline.
Exchange Rates UK Research
Our currency coverage draws on live market data, official economic releases and published bank research.
Gold(XAU/USD) is currently trading at $4,133.61, after a bounce from the $4,073.63 area on the 2-hour time frame. I like to draw your attention to the fact that the price bounce has taken gold above the $4,107-$4,128 area, but is still below a descending trend line and a resistance area formed by the moving averages. Thus, the overall bearish trend is still intact, despite the current bounce.The first area of interest on the upside is at $4,161.46, above which $4,181.44 and $4,216.96 would come into play. On the other hand, the first support comes in at $4,127.56, below which $4,107.28, $4,088.10, and $4,073.63 would come into focus.
The Pound to Dollar exchange rate (GBP/USD) rebounded towards 1.3250 after falling to 16-week lows near 1.3160 following hotter-than-expected US inflation data.
Stronger UK GDP and a retreat in US Treasury yields helped Sterling recover, although persistent underlying US price pressures have reinforced expectations of further Federal Reserve tightening.
GBP/USD Forecasts: Rebound from 16-Week Lows
The Pound to Dollar (GBP/USD) exchange rate rebounded strongly on Thursday after sliding to 16-week lows following hotter-than-expected US inflation data.
GBP/USD had fallen close to 1.3160 after Wednesday’s CPI release, but recovered towards 1.3250 as US Treasury yields retreated and the Dollar surrendered part of its post-inflation gains.
The stronger Pound was also supported by unexpectedly resilient UK growth data.
According to UoB, the recent recovery remains fragile; “To sustain the momentum, GBP must hold above 1.3230.”
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The 2026 low around 1.3140 remains an important downside level, with a sustained break potentially increasing the risk of a move towards 1.3000.
US consumer prices increased sharply in September, reinforcing expectations that the Federal Reserve will tighten policy again before the end of the year.
Headline CPI increased 0.6% on the month, while the annual inflation rate accelerated to 3.7% from 3.4%, above consensus forecasts of 3.6%.
The increase was driven partly by a 7.1% monthly jump in gasoline prices.
Core prices rose 0.3% on the month, compared with expectations of 0.2%, while the annual core rate increased to 2.6% from 2.4%.
The figures triggered an immediate surge in US Treasury yields and broad Dollar gains.
Markets raised the probability of an October Federal Reserve hike sharply following the release, although pricing subsequently moderated as bond yields retreated.
A December increase remains much more firmly priced.
Schroders senior economist George Brown commented; “While energy prices might be grabbing the headlines, today’s report suggests the inflation problem runs much deeper.”
He added; “A stronger-than-expected core inflation reading adds to mounting evidence that domestic price pressures are becoming more entrenched, rather than easing.”
ING currently expects the Federal Reserve to wait until December before increasing rates again, although it sees risks skewed towards additional tightening if inflation remains elevated.
MUFG is also cautious over extrapolating the latest rise in prices into a prolonged tightening cycle.
The bank commented; “We remain sceptical that inflation pressures will continue to build and while we expect the Fed to hike again in December, we do not expect the Fed to deliver the two further rate hikes currently priced by the markets.”
Pound Sterling received an additional boost on Thursday after the latest UK growth figures exceeded expectations.
UK GDP increased by 0.1% in August compared with forecasts for a 0.1% contraction.
Annual growth accelerated to 2.1%, while manufacturing output increased sharply during the month.
The data provided some reassurance that the UK economy is proving more resilient than feared despite elevated energy prices and borrowing costs.
The Pound also benefited from the retreat in US Treasury yields as investors moved into government bonds amid renewed weakness in global technology stocks.
The Dollar consequently gave back part of Wednesday’s CPI-driven advance.
For GBP/USD, the 1.3230-1.3250 region is now the immediate technical area to watch.
A sustained recovery above 1.3275 would improve the short-term outlook and could bring 1.3300-1.3350 back into focus.
Conversely, renewed Dollar buying would expose 1.3200 followed by the 2026 low around 1.3140.
The wider direction will remain highly sensitive to US rate expectations, with upcoming retail-sales and producer-price data likely to determine whether Wednesday’s inflation shock produces another sustained rise in Treasury yields.
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Wednesday’s high came before the number. A build near 73 Bcf gives buyers another shot at the market. A print near 77 Bcf leaves room for the sellers who hit the market late Wednesday.
Warm Weather Comes Back Next Week
Highs in the 80s and 90s are running from East Texas to the Mid-Atlantic Coast Thursday. A cold system is crossing the Midwest with highs in the 40s and 50s. It reaches the Great Lakes and Northeast this weekend, with lows in the teens to 30s.
NatGasWeather sees moderate demand from Friday through Sunday, then low demand next week. The Commodity Weather Group sees above-average temperatures spreading across the central third of the country from October 19 through October 23.
The cold is in the forecast. So is the warmth behind it.
LNG and TCO Are Holding the Bullish Side Together
Estimated LNG net flows to U.S. export terminals were 19.7 Bcf per day Wednesday, up 9.6% from the prior week, according to BNEF. European gas storage was 74% full as of October 12, compared with the five-year seasonal average of 89%.
The TCO pipeline outage has also put future storage builds back on the board. LNG demand, lower European storage and the outage are the three supply-side issues traders are carrying into the EIA report.
Lower-48 dry gas production was 111.2 Bcf per day Wednesday, up 2.9% from a year ago, according to BNEF. Lower-48 gas demand was 72.7 Bcf per day, up 3.8% from a year ago.
Production Is Not Getting Out of the Way
LNG is making the dips harder to sell, but the market is not short gas. The EIA still sees end-of-October storage at 3,985 Bcf, the highest level in 10 years and 5% above the five-year average. It also raised its 2027 dry gas production forecast to 116.0 Bcf per day from 115.3 Bcf per day.
Last week’s 85 Bcf build was a little above the 82 Bcf estimate, but still below the five-year average of 96 Bcf. Inventories are 2.0% above the seasonal average and 3.9% below last year. That is not a supply squeeze.
Baker Hughes took one gas rig out of the count, leaving 132. That is down from 135 two weeks ago. Meanwhile, Lower-48 output is running at 111.2 Bcf per day. One rig is not going to change that story.
What to Watch
The storage report is the first real answer after Wednesday’s break. A light injection gives the buyers another reason to stay with LNG demand and the TCO outage. A larger build brings the warm weather trade right back into the market. Next week is the harder problem. Demand fades, the central United States stays warm and production remains heavy.
Wednesday’s reversal top is still sitting on the chart. The main trend held up, but buyers have to take out Wednesday’s high to dismiss the reversal. Sellers need a break under Wednesday’s low to prove it. Until then, neither side has finished the job.
EUR/USDis trading near 1.1211 on the 4-hour chart after bouncing up from 1.1112. Price has since moved above 1.1153, but it remains below the descending trendline and the shorter- term moving average. The broader technical structure remains bearish.
The first area of resistance is at 1.1237. Should price break through that level, the next area of resistance is at 1.1278 and the final area of resistance is at 1.1316. The first area of support is at 1.1153. The second area of support is at 1.1112. The final area of support is at 1.1071. Support may be tested if the rebound fails.
RSI is in the bullish territory and has improved from the previous oversold territory. I am neutral to bearish with a slightly bearish bias while EUR/USD remains below 1.1237 and the descending trendline.
Should EUR/USD break above 1.1237, that would improve the chances of a further rebound. Should it break below 1.1153, that would put 1.1112 back in focus.
