France and high oil prices weigh on the euro: EURUSD clings to 1.1230

The EURUSD pair remains near a local low amid political and budget uncertainty in France, a strong dollar, and a renewed rise in oil prices. The rate currently stands at 1.1234. Find out more in our analysis for 7 October 2026.

EURUSD forecast: key takeaways

• The market is awaiting the minutes of the latest Fed meeting, with the probability of rates remaining unchanged in October estimated at almost 80%
• Political and fiscal problems in France are adding to pressure on the euro
• EURUSD forecast for 7 October 2026: 1.1223 and 1.1187

Fundamental analysis

The EURUSD rate is hovering around 1.1234 on Wednesday. All eyes are on the release of the minutes from the latest Federal Reserve meeting, which may provide additional signals about the future trajectory of interest rates.

Fed officials’ rhetoric is gradually becoming less hawkish following weaker PCE data and labour market statistics. The market currently estimates the likelihood of rates remaining unchanged in October at almost 80%. While this limits the potential for further dollar strengthening, it has yet to generate sufficient momentum for a sustained EURUSD recovery.

The situation in France is adding further pressure on the euro. Political uncertainty and concerns about public finances are increasing the risk premium on European assets and dampening sentiment towards the single currency.

Meanwhile, oil prices are rising again following intensified Iranian attacks on tankers in the Strait of Hormuz and ongoing clashes between Saudi Arabia and the Houthis. Rising energy costs are bringing back inflation risks and supporting the likelihood that major central banks will maintain tight monetary policies. High energy prices also remain a negative factor for the eurozone due to the region’s dependence on imports.

The EURUSD outlook is moderately bearish.

Technical outlook

On the H4 timeframe, the EURUSD pair remains in a steady downtrend and continues to form lower highs and lower lows while staying below the middle Bollinger Band. Following a short-term recovery from the 1.1187 level, the price is once again facing pressure around 1.1234.

MACD remains below zero, although the indicator line is above the signal line, indicating that the previous bearish momentum is weakening. The Stochastic Oscillator is in neutral territory, but the short-term signal favours sellers.

The nearest support level is located at 1.1223. A breakout below this level would confirm a resumption of the downward move and open the way to 1.1187. To weaken the bearish scenario, the EURUSD pair needs to return above 1.1259, after which the next target would be the 1.1295 area.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: bearish
• Key resistance levels: 1.1259 and 1.1295
• Key support levels: 1.1223 and 1.1187

EURUSD trading scenario for today

Trading scenario (Sell Stop)

A consolidation below the local support level at 1.1223 would confirm continued downward momentum and create conditions for opening short positions.

• Current price: 1.1234
• Entry level: 1.1220
• Take profit: 1.1187
• Stop loss: 1.1237
• Risk-to-reward ratio: 1:1.94

The trade idea is valid until 8:00 AM on 8 October 2026 (server time, UTC+3).

Risk factors

The main risk to the bearish EURUSD scenario would be a more dovish tone in the Federal Reserve minutes and a further decline in expectations of US rate hikes. This could trigger a dollar correction and support the euro. A stabilisation of the political situation in France poses an additional risk. A return above 1.1259 would weaken the bearish scenario and increase the likelihood of a recovery towards 1.1295.

Summary

The EURUSD pair remains under pressure from political risks in Europe and a strong dollar, maintaining a bearish bias. The EURUSD forecast for today, 7 October 2026, does not rule out a decline towards 1.1223 and then 1.1187.

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