EUR/USD Slides as Hot US CPI Revives Fed Hike Bets

Hot US CPI data for October has made a Fed interest rate hike in December almost certain, and the dollar regained control. Consumer prices rose by 0.4%, while core inflation increased by 0.3% month over month, with both figures exceeding expectations, and the core PCE price index, the Fed's preferred inflation gauge, rose to 3.3% year over year, its highest level since November 2023. EUR/USD fell sharply from around 1.1225, broke below 1.1188 and 1.1168, and now sits near 1.1162 in a descending channel. The probability of a rate hike at the Fed's December 9 meeting remains close to 85%, while markets price a 84.0% probability of a 25 bps hike to 2.75% at the ECB's December meeting.

Eurozone annual inflation accelerated to 4.0% in October 2026, up from 3.8% in September, driven primarily by a sharp surge in energy prices amid continued fighting in the Middle East, with energy inflation jumping to 20.8%. ECB President Christine Lagarde said the ECB was monitoring incoming data to determine whether a rate hike would be warranted next month, and several policymakers indicated that a December increase may be likely. Yet the euro remains structurally heavy. The currency remains under pressure from France's political and fiscal challenges, as well as uncertainty surrounding ECB President Christine Lagarde's early departure, with the Eurogroup set to assess the candidates this week.

What the calendar says

The next 3 events are: FOMC Minutes Release (Wednesday, November 18, 2026); FOMC Meeting Day 1 (Tuesday, December 8, 2026); FOMC Rate Decision (SEP) (Wednesday, December 9, 2026). The Federal Reserve is scheduled to announce its interest rate decision on Wednesday, December 9, 2026 at 2:00 PM ET, followed by a press conference at 2:30 PM ET. A Summary of Economic Projections and dot plot are released only at the March, June, September, and December meetings, making this a high-impact event.

The ECB Governing Council meets December 16-17, with the rate decision on Thursday, 17 December 2026, at 14:15 CET. President Christine Lagarde's press conference follows 30 minutes later at 14:45 CET. December is one of four quarterly projection meetings and is particularly critical because it introduces the first forecasts for the 2029 horizon, which dictates long-term interest rate expectations. The timing is tight: both banks meet within nine days, and neither has left room for error.

Technical picture

The chart shows EUR/USD trading around 1.1162 as of November 11, down from recent highs near 1.1225. The pair broke below 1.1188 and 1.1168, and a close below 1.1149 would expose 1.1129, then 1.1104. The pair's 2026 range runs from 1.1105, set on 29 October, to 1.2081, set on 27 January, and price now sits closer to the floor than the ceiling.

Resistance sits at 1.1188, the level that capped Monday's recovery, then 1.1225, where the sell-off began. The channel's lower boundary is nearing that support zone, making it a key test for the broader range. Short-term momentum has turned bearish after the inflation print, with the descending channel intact and price action compressed into the lower third of the year's range. The hourly structure favours further downside pressure unless macroeconomic surprises intervene before the December meetings.

Our technical signal engine currently reads Strong Sell, consistent with the breakdown below the 1.1180–1.1190 zone and the proximity to October's low near 1.1105. The next fortnight will be shaped less by the levels themselves than by what the calendars deliver: US retail sales on November 17, eurozone inflation readings on November 18, FOMC minutes the same day, and then the back-to-back rate decisions in the second week of December that will reset the policy divergence trade into year-end.