EURUSD recovers, but downside risks remain

The EURUSD pair remains influenced by expectations surrounding US inflation data and the progress of trade negotiations with China, currently trading at 1.1604. Discover more in our analysis for 22 October 2025.

EURUSD forecast: key trading points

• White House advisor Kevin Hassett stated that the US government shutdown is likely to end this week
• Investors are focused on Friday’s US Consumer Price Index (CPI) report
• EURUSD forecast for 22 October 2025: 1.1545

Fundamental analysis

The EURUSD pair is showing a moderate correction after three consecutive sessions of decline; however, the euro remains under pressure. The US dollar gained support from comments by President Donald Trump, who expressed confidence in reaching a trade deal with Chinese President Xi Jinping.

Ahead of the leaders’ meeting, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are expected to hold preparatory talks. Another factor supporting the dollar came from White House economic advisor Kevin Hassett, who said the US government shutdown is likely to end this week.

Market participants are now turning their attention to Friday’s US CPI report, which could play a decisive role in shaping the Federal Reserve’s decision on whether to cut interest rates at the next meeting.

EURUSD technical analysis

On the H4 chart, the EURUSD pair has once again bounced off the EMA-65, signalling that bearish momentum remains intact. Selling pressure remains noticeable, with the emerging Triangle pattern suggesting short-term consolidation before a possible continuation of the downtrend.

In today’s EURUSD forecast, a brief correction is expected, followed by a potential decline towards 1.1545. An additional signal comes from the Stochastic Oscillator, which has entered overbought territory, confirming the potential for renewed downward pressure.

A consolidation below 1.1590 would confirm a breakout below the lower boundary of the Triangle pattern and strengthen the likelihood of further downside movement.

Summary

The EURUSD rate remains under pressure, with future movement likely driven by the outcome of US-China trade talks and upcoming US inflation data, which could influence the Federal Reserve’s next policy decision. Technical analysis of EURUSD suggests a short-term correction may be followed by continued decline towards 1.1545.

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