Forex · 5 November 2026
EUR/USD: Midterm Shock Lifts Pair Into NFP and CPI Week
Democrats' midterm sweep and euro-zone inflation drove the euro above 1.1200; US payrolls on Friday and CPI on Tuesday are the tests ahead.
Ultimo Research
The euro rose to 1.124 in early November, reaching its strongest level since early October, as investors dumped the US dollar following a sweeping Democratic victory in the midterm elections. Eurozone annual inflation accelerated to 4.0% in October, its highest level since September 2023 and well above the ECB's 2% target, mainly driven by an energy cost surge. The single currency has also drawn support from increasingly hawkish rhetoric among European Central Bank policymakers, with officials signaling that further rate increases may be necessary to contain inflationary pressures.
The ECB left interest rates unchanged at its October meeting, keeping the main refinancing rate at 2.65% and the deposit facility rate at 2.50%, with President Christine Lagarde confirming the ECB discussed a rate hike but unanimously agreed to hold rates steady. The Federal Reserve left the federal funds rate unchanged at 3.75%–4.00% at its October meeting, following a 25bps hike in September, with two policymakers voting for a further quarter-point rise. The next Fed interest rate decision is Wednesday 9 December 2026, where futures markets price a quarter-point rise as the most likely outcome, and market pricing for a December rise climbed to around 85% after the hold.
The US economy added 29K jobs in September 2026, well below forecasts of 90K, setting the stage for Friday's report. Political uncertainty, elevated inflation and diverging labour-market signals are driving volatility in EUR/USD even before the week's two main data releases.
What the calendar says
The week brings two tier-one US releases that will move EUR/USD and reset Fed expectations. The US nonfarm payrolls report for October is due at 13:30 UTC on Friday 6 November, with forecasts pointing to around 65,000 new jobs after 29,000 in September and unemployment expected to stay at 4.2%. Annual wage growth is forecast to slow to 2.9% from 3.0%.
Beyond Friday, the US inflation print lands on Tuesday 10 November 2026 at 12:30 UTC. The Consumer Price Index release comes five days after payrolls and will determine whether rising energy costs are spreading into core prices. Together, the two reports will shape the path for the December Fed decision and, with it, the dollar's trajectory into year-end. Our economic calendar lists full detail and real-time updates.
Technical picture
The hourly chart shows EUR/USD trading between 1.1114 and 1.1223 during the displayed period from mid-October to early November 2026. In the feed shown, EUR/USD closed the week at 1.1159. The pair bottomed near 1.1105 on Thursday before the midterm-driven rebound pushed it back above 1.12.
Resistance sits at 1.1202, the close of 23 October, then 1.1223, the late-October high. A sustained break above that cluster would bring 1.1269 and 1.1300 into range. On the downside, support lies at 1.1114, the late-October low; a daily close beneath 1.1113 would put the pair under its three-month fixing range and bring 1.1100, then 1.1000, into view. The horizontal line near 1.1245 on the chart marks the middle of the recent consolidation; price action around that line into payrolls will signal whether bulls or bears control the near-term structure.
The in-house signal engine reads Strong Buy, but the calendar will decide whether that view holds. With speculators holding near-record euro shorts and two high-impact releases ahead, the scope for sharp moves in either direction is unusually high.
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