EURUSD tests resistance, but the broader trend remains downward

Political risks are hindering a sustained recovery of the euro. The rate currently stands at 1.1228. Discover more in our analysis for 20 October 2026.

EURUSD forecast: key takeaways

• Annual inflation in the EU accelerated to 3.8% in September
• US consumer inflation accelerated to 3.7% year-on-year
• EURUSD forecast for 20 October 2026: 1.1070

Fundamental analysis

According to Eurostat data released on 16 October, annual inflation in the eurozone accelerated from 3.2% to 3.8% in September 2026, reaching its highest level in a considerable period. The actual reading matched analysts' forecast of 3.8%, but the substantial acceleration in inflation indicates increasing price pressures on the European economy. Inflation also remains well above the ECB's 2% target.

The main driver of accelerating inflation was higher energy prices linked to geopolitical tensions in the Middle East. Rising service costs are putting additional pressure on consumer prices. These developments increase the likelihood that the European Central Bank will maintain restrictive monetary policy in the coming months.

Another negative factor is growing political and fiscal uncertainty in France. The rise in French government bond yields relative to German yields indicates that investors perceive greater risks.

Today's EURUSD forecast is negative for the euro. Accelerating eurozone inflation could provide support for the euro in the medium term, but has yet to bring about a sustained reversal in the EURUSD rate. Higher yields on dollar-denominated assets, persistent inflation risks in the US, and political uncertainty in Europe continue to create conditions for the US currency to strengthen.

Technical outlook

On the D1 chart, the EURUSD pair formed a resistance level at 1.1270 and a support level at 1.1150. The broader trend remains downward, although a shift to sideways trading is highly likely. On the H4 chart, support has formed at 1.1205, with resistance at 1.1250. The main downside target is 1.1070.

However, today's EURUSD forecast also considers an alternative scenario. The price could break above the 1.1250 resistance level and reach 1.1335.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: downward
• Key resistance levels: 1.1250 and 1.1270
• Key support levels: 1.1150 and 1.1205

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 set the stage for opening short positions.

• Current price: 1.1228
• Entry level: 1.1180
• Stop loss: 1.1210
• Take profit: 1.1070
• Risk-to-reward ratio: 1:3.67

The trade idea is valid until 8:00 AM on 21 October 2026 (server time, UTC+3).

Risk factors

The main risks for the EURUSD pair are a further acceleration in US inflation, a possible increase in Federal Reserve interest rates, political instability in France and continued tensions in energy markets. At the same time, a more restrictive ECB stance, falling US Treasury yields and a weaker dollar could support a recovery in the European currency.

Summary

The acceleration in eurozone inflation to 3.8% increases the likelihood that the ECB will maintain restrictive monetary policy. However, the positive impact on the euro is limited by the dollar's interest rate advantage and increasing political risks in Europe. EURUSD technical analysis suggests a decline towards the 1.1150 support level.

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