Forex · 24 September 2026
Euro Tests Two-Month Lows as Fed Hawkishness Keeps Dollar in Charge
EUR/USD trades near 1.1385 after Federal Reserve rate hike; payrolls report due next week remains key focus for dollar direction.
Ultimo Research
The euro closed last week more than 0.80% lower at 1.1486 after the Federal Reserve raised interest rates by 25 basis points to a range of 3.75%-4% and delivered a hawkish message that highlighted inflation as a key concern. EUR/USD has continued to decline this week, with the pair now trading near 1.1436 as hawkish comments from Federal Reserve officials have strengthened expectations of further interest-rate increases. The market currently estimates the probability of another Federal Reserve rate hike in October at 54%.
The ECB raised its main interest rates by 0.25 percentage points at its 10 September meeting, increasing the deposit rate from 2.25% to 2.5%, citing inflationary pressures arising from the conflict in the Middle East. The euro has extended its decline below 1.14, touching a fresh near two-month low as the dollar strengthened following stronger-than-expected US PMI data and a series of hawkish remarks from Federal Reserve policymakers, reinforcing expectations of further monetary tightening.
What the calendar says
The week ahead is relatively quiet in terms of scheduled top-tier releases. Traders will shift attention to 2 October 2026 at 12:30 UTC, when the US nonfarm payrolls report for September is scheduled for release by the Bureau of Labor Statistics. The jobs data carries major implications for EUR/USD, GBP/USD, USD/JPY, and gold, particularly given the Fed's renewed focus on inflation and employment dynamics. The full economic calendar has further detail.
EUR/USD: hourly chart shows loss of momentum below 1.1400
The pair has been in a sustained downtrend since early September, falling from levels around 1.1680 to a recent low near 1.1385. In the daily chart, EUR/USD trades at 1.1460, extending its retreat beneath both the short-term and medium-term exponential moving averages, which keeps the near-term bias bearish, with the pair closing the week below 1.1500 not far above a fresh multi-week low of 1.1454.
Initial resistance is now eyed at 1.1419, with near-term bearish invalidation at 1.1472. On the downside, rallies would need to be limited to 1.1419 if price is heading lower on this stretch, with a daily close below 1.1355 needed to fuel the next leg lower. The technical engine reads Strong Sell for EUR/USD; the price action and momentum indicators support that assessment for now, though oversold conditions on shorter intervals may allow for brief corrective bounces.
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