EUR/USD pulled back from session highs as traders focused on the rally in the oil markets. Oil prices gained 3% as President Trump has recently indicated that he could use the “Mother of all Bombs” against Iran. He added that he would not use nuclear. High oil prices boosted demand for safe-haven assets, which was bullish for the American currency.
In case EUR/USD settles below the 50 MA at 1.1201, it will get to the test of the nearest support, which is located in the 1.1175 – 1.1190 range. On the upside, a successful test of the resistance at 1.1250 – 1.1265 will open the way to the test of the next resistance level at 1.1350 – 1.1365.
Warsh said broader economic conditions were in line with expectations set at the Fed’s September rate increase. He acknowledged persistent price pressure and higher global prices, but he did not give traders a signal on the October 28 meeting.
That changed the short-term rate trade. The probability of an October increase fell from around 27% to roughly 15% after his remarks. The U.S. dollar slipped against a basket of major currencies, while S&P 500 futures moved higher.
Gold got a lift from that shift because a weaker dollar makes bullion cheaper for overseas buyers. But Warsh did not remove the Fed from the trade. He only refused to make October the decision.
At 05:54 GMT, Spot Gold is trading $4,173.76, up $3.06 or +0.07%. December Comex Gold is trading $4,194.40, up $24.30 or +0.58%.
The bearish outlook for EURJPY remains unchanged, with the pair trading below the additional resistance barrier at 177.80. This reinforces our expectation that the price will gather negative momentum and begin targeting bearish levels, initially moving toward 176.55 and then 175.75.
However, a successful break above this resistance barrier and sustained trading above it would confirm the start of new corrective waves, potentially allowing the pair to achieve some gains, initially advancing toward 178.60 and then the resistance barrier near 179.45.
The expected trading range for today is between 175.75 and 177.80.
The EIA’s October 6 Short-Term Energy Outlook supplies a separate winter baseline. It projects end-of-October inventories around 3,850 billion cubic feet, roughly 2% above the 5-year average. This model assumes winter heating degree days near last winter’s national level, and inputs were closed October 1. Later weather and operational developments therefore require further assessment.
Supply Growth
Supply growth and export demand remain a competing structural influence, with the EIA forecasting U.S. dry production averaging 112.2 billion cubic feet daily in 2026 and 116.3 billion cubic feet daily in 2027, while LNG exports average 17.6 and 18.6 billion cubic feet daily. These are annual projections, not current daily production or terminal feed gas measurements. Sustained production growth would create more room to accommodate exports and domestic demand. However, a forecast of additional supply is less useful for near-term pricing than evidence that gas is actually being produced or delivered. The distinction applies to LNG capacity, capability, and realized demand on the pipeline system; they are different issues.
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.
