EURUSD on the brink of another fall as the French crisis intensifies pressure on the euro

Political risks are hampering the euro’s sustained recovery, with the rate currently standing at 1.1225. Discover more in our analysis for 19 October 2026.

EURUSD forecast: key takeaways

• The outlook for Fed and ECB interest rate changes remains a key driver for the pair
• Harmonised inflation in France reached 3.4% in September
• EURUSD forecast for 19 October 2026: 1.1150

Fundamental analysis

The EURUSD forecast takes into account that renewed clashes during protests over the cost of living have heightened investors' concerns about political risks and the stability of the French debt market. The pair is undergoing a correction and testing the 1.1225 level.

Cautious statements from Federal Reserve officials and a decline in US Treasury yields have limited the dollar's gains. The outlook for interest rate changes by the Fed and ECB remains a key driver for the pair.

The IMF expects the ECB to raise interest rates by another 0.25 percentage points in 2026 amid persistent inflationary pressure. A more restrictive stance by the European regulator could support the euro if expectations of an ECB rate hike outpace similar expectations for the Federal Reserve.

Harmonised inflation in France reached 3.4% in September, up from 2.6% in August. This has heightened concerns about price pressures and, combined with political uncertainty and rising borrowing costs, also poses additional risks to the European economy.

Today's EURUSD forecast is moderately negative for the euro. The main source of pressure is instability in France; the pair's future direction will depend on signals from the Fed and ECB. A more hawkish stance by the European regulator could limit the decline, but political risks are currently hampering a sustained recovery in the euro.

Technical outlook

On the EURUSD H4 chart, the price has formed a Shooting Star reversal pattern near the lower Bollinger Band. At this stage, quotes may continue their downward wave as the signal plays out, with the downside target at the 1.1150 support level. A breakout below this level would open the way for continued downward momentum.

However, today's EURUSD forecast also considers an alternative scenario. The price could undergo a correction and test the 1.1265 resistance level before declining.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: downward
• Key resistance levels: 1.1265 and 1.1365
• Key support levels: 1.1150 and 1.1110

EURUSD trading scenario for today

Trading scenario (Sell Stop)

A breakout and consolidation below the 1.1150 support level would indicate increased selling pressure and create conditions for opening short positions.

• Current price: 1.1225
• Entry level: 1.1150
• Stop loss: 1.1174
• Take profit: 1.1110
• Risk-to-reward ratio: 1:2

The trade idea is valid until 8:00 AM on 20 October 2026 (server time, UTC+3).

Risk factors

The main risks to the bearish EURUSD scenario are falling US Treasury yields, an easing of Federal Reserve monetary policy, and growing expectations of ECB interest rate hikes.

Summary

The euro remains dependent on economic and political developments in France. EURUSD technical analysis suggests a decline towards the 1.1150 support level.

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