Forex · 21 September 2026
Euro Hangs Near One-Month Lows as Fed Hawks Circle
EUR/USD consolidates at 1.1475 after a 1% weekly drop, with the calendar quiet but Fed rhetoric looming ahead of October meetings.
Ultimo Research
The euro traded just below $1.15 this week, near its weakest level since late July, and was down 1% against the dollar following the Federal Reserve's 25 basis point rate hike to 3.75%-4% on September 16. The EUR/USD hourly chart shows the pair has dropped from 1.1647 in early September to 1.1475 at Friday's close, with the sharpest leg lower coinciding with the Fed decision. The ECB raised its key interest rates by 25 bps at its September 10 meeting, lifting the deposit rate to 2.5%, but the widening policy divergence has kept pressure on the single currency.
The ECB said the conflict in the Middle East continues to fuel inflationary pressures, with inflation expected to remain well above its 2% target, while sixteen of the eighteen Fed policymakers expect at least one additional rate hike before year-end, with Chair Warsh indicating inflation may not return to target until 2029. That hawkish turn has cemented dollar strength across the board. The hourly chart reveals a sequence of lower highs and lower lows since September 9, punctuated by a sharp drop on September 16 from 1.1578 to below 1.1500 within hours of the FOMC statement.
What the calendar says
This week's economic calendar is light on actual reports but heavy on Federal Reserve speakers, with central bankers making no fewer than 10 appearances. No tier-one US or eurozone data releases are scheduled between September 21 and September 25, leaving markets to parse Fed commentary for clues on the October path. The ECB's next policy decision is October 29, 2026, while the next FOMC meeting is October 27-28, with the rate decision due Wednesday, October 28, 2026 at 2:00 PM ET. Markets currently price a 67% probability of a 25 bps ECB hike to 2.75% at that meeting. The full schedule and any changes can be tracked on our economic calendar.
EUR/USD: technical floor under pressure
The one-hour chart plots a clean downtrend channel. Resistance clusters around 1.1520–1.1540, where rallies have stalled repeatedly since mid-September. The pair found brief support near 1.1463 on September 17 before bouncing modestly, but bulls have yet to reclaim 1.1500 on a sustained basis. The 200-period moving average on the hourly frame has rolled over and now acts as dynamic resistance in the 1.1550 zone. A break below 1.1463 would expose the year-to-date range low, while any recovery requires a close above 1.1540 to ease immediate downside risk. Volume spikes on the way down and thin bounces suggest sellers remain in control. Our in-house signal engine reads Strong Sell, consistent with the chart structure and the post-Fed momentum.
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