On Monday, EUR/USD reversed in favor of the US dollar once again and began another decline toward the 1.1081–1.1086 support level. A rebound from this zone would favor the euro and allow for a recovery. However, at present, it is extremely difficult to identify what could halt the euro's decline. Consolidation below the 1.1081–1.1086 level would increase the likelihood of a further decline toward the 200.0% Fibonacci level at 1.0939.

The wave structure on the hourly chart remains bearish. The latest completed upward wave failed to break below the previous low, while the new downward wave has not yet broken below the previous low either. Following the September FOMC meeting, traders have been anticipating at least one more monetary policy tightening before the end of the year and another next year. This factor continues to provide substantial support for the US dollar, while other factors have yet to play a significant role. Bearish momentum also remains strong, helping the dollar maintain its strength.

Monday's news background supported bullish traders. Although Germany's business climate index cannot be considered a major economic release, it nevertheless favored the European currency. However, this is far from the first time that a reasonably positive European economic report has been ignored by the market. In the current conditions, the euro appears to be experiencing an unjustified decline.

Some traders currently believe that the Fed's stance may be more hawkish this week than the ECB's. This appears to be an attempt to interpret developments in line with expectations rather than the available evidence. The dollar has been rising with few interruptions, and many traders are trying to explain the current strength of the bears. As a result, the ECB has raised interest rates twice, yet its stance is described as dovish. The Fed has raised rates only once, yet its stance is described as hawkish. Such characterizations are difficult to reconcile with the actual policy decisions. The US dollar appears to remain strong across the broader market not because of the monetary policies of the Fed and the ECB. Geopolitical developments may be providing support, but the central banks are unlikely to be the primary driver.

On the 4-hour chart, EUR/USD reversed in favor of the US dollar following the formation of a bearish divergence in the CCI indicator. A new decline has begun toward the 161.8% Fibonacci retracement level at 1.1088. No new emerging divergences are currently visible on any of the indicators. Consolidation above the 127.2% Fibonacci level at 1.1221 would allow traders to anticipate a resumption of the advance toward the 100.0% retracement level at 1.1325.

Commitments of Traders (COT) Report

During the latest reporting week, professional traders opened 3,492 Long positions and 443 Short positions. Speculators currently hold a total of 226,000 Long positions and 361,000 Short positions. The bears remain in control, and the euro continues to be sold more often than it is bought. This can be attributed to the complex geopolitical situation in the Middle East and Kevin Warsh's efforts to bring inflation down. The market continues to believe that inflation will be reduced to 2% by any available means.

Overall, large market participants continue to show considerable interest in the euro over the long term. Global events of various kinds, which have been abundant in recent years, inevitably influence investor sentiment and put pressure on risk-sensitive currencies. Furthermore, 2026 could set a record for the number of unforeseen events. Traders therefore have little choice but to adapt to changing conditions as they unfold.

Economic Calendar for the United States and the European Union

• United States – Durable Goods Orders (12:30 UTC).
• United States – New Home Sales (14:00 UTC).
• European Union – Speech by ECB President Christine Lagarde (17:00 UTC).

On October 27, the economic calendar contains three events. Economic data and central bank commentary may influence market sentiment during the second half of Tuesday's trading session.

EUR/USD Forecast and Trading Recommendations

Buying opportunities may arise today if the pair rebounds from the 1.1081–1.1086 level on the hourly chart, with a target of 1.1220. Selling opportunities arose when the pair closed below 1.1220, with the 1.1081–1.1086 support level as the target. These positions can remain open today.

The Fibonacci retracement levels are drawn from 1.1325 to 1.1712 on both the hourly and 4-hour charts.