EURUSD prepares for a trend reversal

EURUSD is recovering and preparing to move higher. The current price is 1.1294. Find out more in our analysis for 1 October 2026.

EURUSD forecast: key takeaways

• Market participants' assessment of the probability of a Federal Reserve rate hike at the 28 October meeting fell sharply to 35% from 70% previously, according to CME FedWatch
• August Core PCE came in at 3.0% year-on-year versus expectations of around 3.3%
• EURUSD forecast for 1 October 2026: 1.1430

Fundamental analysis

US Core PCE data somewhat improved the fundamental backdrop for EURUSD. August Core PCE came in at 3.0% year-on-year versus expectations of around 3.3%. On a monthly basis, the core measure rose by 0.2%. For the currency market, this is generally a negative factor for the dollar, as weaker inflationary pressure reduces the need for rapid further Federal Reserve policy tightening. Following the release, the probability of a Federal Reserve rate hike at the 27–28 October meeting fell to around 35%.

At the same time, the data should be interpreted with caution. The previous July Core PCE reading was revised from an initial 3.3% to 3.0% following changes to the methodology used to calculate certain components of the index. According to an estimate cited by Reuters, the methodological changes reduced the annual core inflation reading by around 36 basis points. Therefore, the current 3.0% figure should not be viewed as a sharp actual slowdown in inflation from 3.3% to 3.0% in a single month.

The situation in the eurozone is somewhat more favourable for the euro from an interest-rate perspective. The ECB also raised rates by 25 basis points on 10 September and expects average eurozone inflation to stand at 3.0% in 2026. Expectations of further ECB policy tightening received additional support from German data published on 30 September: harmonised inflation accelerated to 3.3% year-on-year from 2.9% in August and came in slightly above forecasts.

The EURUSD forecast for 1 October 2026 is bullish.

Technical outlook

EURUSD is correcting, which could lead to a shift to an uptrend. Today's EURUSD forecast for 1 October 2026 suggests the beginning of a rise, with the nearest target at 1.1430.

On the H4 timeframe, resistance has formed at 1.1335, while support is located at 1.1310. The price attempted to consolidate above the previously broken D1 support at 1.1355. As the support held, there is a high probability of a trend reversal to the upside. In the broader picture, this could develop into a relatively prolonged correction of the overall decline.

The alternative scenario assumes a breakout below the 1.1310 support level followed by consolidation below it. Such a signal would indicate weakening buyer pressure. In this case, EURUSD could continue falling towards the nearest target at 1.1250.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: bullish
• Key resistance level: 1.1335
• Key support level: 1.1310

EURUSD trading scenario for today

Trading scenario (Buy Stop)

A resumption of EURUSD gains and a breakout above the upper boundary of the correction channel, followed by consolidation above 1.1335, would indicate a renewed bullish impulse and create conditions for opening long positions in the pair, with a target at 1.1430.

• Current price: 1.1294
• Entry level: 1.1335
• Take Profit: 1.1430
• Stop Loss: 1.1305
• Risk-to-reward ratio: above 1:3.2

The trade idea is valid until 08:00 AM on 2 October 2026 (server time, UTC+3).

Risk factors

The main risk factors for EURUSD are related to possible changes in expectations regarding Federal Reserve and ECB policy. Despite the weaker Core PCE reading, US inflation remains above the target level, so new strong data on the labour market, consumer activity, or inflation could once again strengthen expectations of a Federal Reserve rate hike and support the dollar. Weakness in the eurozone economy remains an additional risk for the euro.

Summary

From a fundamental perspective, the Core PCE release has a moderately positive impact on EURUSD. It weakens the case for consecutive Federal Reserve rate hikes and reduces the dollar's interest-rate expectations advantage. However, this may not be enough to establish a sustainable EURUSD uptrend. A breakout above 1.1360 would open the way for a rise towards 1.1430.

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