EUR/USD slides to 1.11133 ahead of Fed and ECB rate decisions

EUR/USD dropped sharply to 1.11133 during Monday's session, extending October's descent and testing the year-to-date low of 1.11130 set on 14 October. The pair now trades beneath all major moving averages in a descending channel, with momentum indicators pointing firmly lower. Selling pressure has intensified across multiple timeframes, and the price action shows signs of compression against critical support, raising the risk of a deeper break as two pivotal central-bank meetings approach within 24 hours of each other.

The recent decline reflects a broader shift in market focus. Concerns over French sovereign debt, which had driven the pair's inverse correlation with French bond yields through mid-October, have faded sharply. Instead, sentiment around artificial intelligence and US growth expectations has re-emerged as a dominant driver of dollar strength. The equally weighted basket of AI-related equity indices—comprising Nasdaq 100 futures, semiconductor and Asian technology benchmarks—is once again influencing the greenback's direction, suggesting that earnings from major technology firms may carry as much weight as formal policy announcements.

What the calendar says

The Federal Reserve announces its October rate decision on 28 October 2026 at 18:00 UTC. Markets assign just an 8% probability to a 25-basis-point hike at this meeting, expecting the committee to hold steady. However, pricing for December flips sharply, with a 93% probability of at least one 25-basis-point increase by year-end. The statement's tone, the voting split and the post-decision press conference will determine whether that hawkish outlook remains justified.

Less than a day later, the European Central Bank delivers its own October decision on 29 October 2026 at 12:15 UTC. Like the Fed, the ECB is expected to leave rates unchanged at 2.50%, with December seen as the more likely window for tightening. No updated economic forecasts accompany Thursday's announcement, so the policy statement and press conference will be scrutinised for any shift in language that either reinforces or undermines the hawkish pricing already embedded in the curve. Energy price pressures continue to complicate the inflation picture, while volatility across EU sovereign bond markets remains a headwind.

Looking further ahead, the US jobs report lands on 6 November 2026 at 12:30 UTC, providing the next major catalyst for dollar direction and central-bank expectations. Our full schedule sits on the economic calendar.

Technical picture

The chart confirms that EUR/USD remains locked in a descending channel with a slope of approximately -15 degrees, with price now testing the outer edge of lower volatility boundaries. The current level of 1.11133 coincides with a dense demand zone spanning 1.1080 to 1.1135, which has absorbed buying interest across seven timeframes. A confirmed close beneath 1.1113 would leave the pair with minimal visible support until 1.1065—the May 2025 swing low—and then 1.0900, a level that has acted as a long-term pivot.

Momentum readings show severe selling velocity across intraday periods, with only isolated green signals on the M15 timeframe. The weekly anchor provides a foundational floor, but intermediate structures from M30 through H4 are aligned negatively. RSI is approaching oversold territory without yet reaching the extreme reading seen earlier this month, while MACD threatens another bearish crossover as it converges on its signal line.

Any corrective bounce would face immediate resistance at 1.1210 to 1.1240, backed by a secondary supply cluster at 1.1270 to 1.1310. The 50% Fibonacci retracement of the January 2025 to January 2026 rally sits at 1.1130, a level the pair briefly defended earlier in October before renewed selling took hold. The compression of price action and the repeated failure to sustain moves above 1.1250 suggest that downside risks continue to build as the calendar enters its busiest stretch.