EURUSD weekly forecast: the euro attempts to extend its corrective rise

The EURUSD pair ended the week near 1.1230, breaking a five-week losing streak. After rebounding from the 1.1160 support level, the pair recovered amid a weaker dollar, although the medium-term downtrend remains intact.

This week, EURUSD movements will depend on the ZEW economic sentiment indices for Germany and the eurozone, US housing and labour market data, and US consumer inflation expectations.

EURUSD forecast for this week: quick overview

• Market focus: during the week of 19–23 October, investors will focus on the ZEW economic sentiment indices for Germany and the eurozone, US housing and labour market data, and US consumer inflation expectations. These releases could influence expectations for the Federal Reserve and ECB’s future policies and determine EURUSD’s short-term direction
• Current trend: the EURUSD pair remains in a downtrend on the daily chart, although buyers are attempting to defend a strong support level near 1.1160, which also coincides with the lower boundary of the descending channel. The Stochastic Oscillator has reached oversold territory and is forming a bullish crossover, indicating the potential for a continued corrective recovery during the next trading week. However, the indicator’s signal does not yet confirm a reversal of the medium-term trend
• Weekly outlook: the baseline scenario suggests a continued corrective rise provided the 1.1160 support level holds. A sustained move above 1.1270 would be the first sign of strengthening buying momentum. In this case, buyers could extend the rise towards 1.1465. An alternative scenario would be triggered by a move back below 1.1160, increasing the likelihood of another decline

EURUSD key levels for next week

The fundamental backdrop for the EURUSD pair during the week of 19–23 October will depend on economic data releases in the eurozone and the US. On Tuesday, investors will focus on the ZEW economic sentiment indices for Germany and the eurozone. A projected decline in the German index from 34.7 to 25.8 points could increase pressure on the euro if the actual figures confirm a deterioration in economic expectations.

In the US, market participants will assess housing market statistics, including housing starts and building permits, as well as weekly jobless claims. These releases will help gauge the resilience of the US economy and could influence expectations regarding the Fed’s future policy.

Additional attention on Friday will turn to the University of Michigan Consumer Sentiment Index and household inflation expectations. Persistent inflation expectations and strong economic data could support the US dollar if they heighten concerns that a hawkish monetary policy will remain in place.

Thus, despite the rebound from the 1.1160 support level, fundamental factors do not yet provide a clear signal of a reversal in the medium-term downtrend. However, a deterioration in US economic data would increase the likelihood of the correction continuing.

EURUSD technical analysis

Technical analysis of the EURUSD daily chart indicates that the downtrend remains intact despite the developing bullish correction. However, buyers are already testing the upper boundary of the medium-term descending channel, a breakout above which could strengthen the advance.

The 1.1160 support level remains crucial to the current bearish structure. Continued defence of this level and a convincing rebound would indicate a high probability of further gains towards 1.1465.

The Stochastic Oscillator is in oversold territory, strengthening signals of a developing bullish correction. Its signal lines are also crossing, generating a buy signal against the prevailing downtrend.

The combination of technical signals, namely a rebound from strong support and a bullish crossover on the oscillator, suggests a further rise during the next trading week.

EURUSD trading scenario for next week

EURUSD’s current advance has ended a run of five consecutive weeks of declines, which may indicate that buyers are attempting to regain ground and develop a full-fledged bullish correction.

Buy scenario

A consolidation above the upper boundary of the descending channel, with the price breaking above a local resistance level at 1.1270, would confirm EURUSD’s upward movement and create conditions for a move towards the next significant technical levels.

• Entry level: Buy Stop 1.1275
• Stop loss: 1.1205
• Take profit: 1.1465
• Risk-to-reward: more than 1:2

The trade idea is valid until 8:00 AM 23 October 2026 (server time, UTC+3).

If EURUSD bulls fail to break above the 1.1270 resistance level, the trading idea will not be activated.

Summary

The EURUSD pair has shown a strong rebound from the key support level at 1.1160 and is developing a full-fledged bullish correction, although it is still too early to declare the downtrend over.

The EURUSD forecast for the week of 19–23 October suggests a continued recovery towards the 1.1465 target, provided local resistance at 1.1270 is decisively broken.

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