{"id":438371,"date":"2026-09-18T20:20:27","date_gmt":"2026-09-18T13:20:27","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/eur-usd-remains-skewed-to-the-downside-as-focus-shifts-to-trump-meeting-with-gulf-leaders-438371\/"},"modified":"2026-09-18T20:20:27","modified_gmt":"2026-09-18T13:20:27","slug":"eur-usd-remains-skewed-to-the-downside-as-focus-shifts-to-trump-meeting-with-gulf-leaders","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/eur-usd-remains-skewed-to-the-downside-as-focus-shifts-to-trump-meeting-with-gulf-leaders-438371\/","title":{"rendered":"EUR\/USD remains skewed to the downside as focus shifts to Trump meeting with Gulf leaders"},"content":{"rendered":"
\n

FUNDAMENTAL
\n OVERVIEW<\/p>\n

\u00a0<\/p>\n

USD:<\/p>\n

The US dollar rallied
\n across the board on Wednesday following the FOMC decision as the market
\n interpreted as more hawkish than expected. The Fed hiked interest rates by 25
\n bps as widely expected in an unanimous decision. Moreover, the part saying that
\n inflation remained elevated in part reflecting supply shocks was removed. The
\n SEP showed an upward revision for growth and inflation, and downward revision
\n for unemployment.<\/p>\n

The most important
\n thing was the dot plot where the Fed projected just one more rate hike in 2026,
\n with rates staying higher throughout 2027 before rate cuts in 2028. That was
\n more dovish compared to market’s pricing which saw one more rate hike in 2026 and
\n two more in 2027. <\/p>\n

I think this shows that the Fed has low appetite for an extended tightening cycle<\/a>. Fed Chair Warsh
\n mostly repeated his Jackson Hole speech, but he was still seen as being more
\n hawkish. I’m not sure why.<\/p>\n

Anyway, the market
\n brought forward rate hike expectations for October, with the probability rising
\n to 57%. I guess that’s because Warsh mentioned that they want to see a timelier
\n return to the 2% target.<\/p>\n

Looking ahead,
\n watch carefully the situation in the Middle East as $100 oil, rate hikes and
\n elevated bond yields might put more pressure on Trump to end the war. We might
\n be already entering a de-escalation phase as Trump called a meeting with Gulf
\n leaders on Tuesday on the sidelines of the UN General Assembly in New York to
\n discuss the next steps in the war with Iran. Notably, the Iranian delegation
\n will be allowed to participate. A de-escalation would send oil prices lower,
\n easing inflation and rate hikes concerns, ultimately weighing on the greenback.<\/p>\n

Economic data will
\n also be key. When positioning and market expectations become stretched, even a
\n modest shift in the data can trigger a significant reversal. If the US data
\n starts surprising to the downside, expectations for aggressive rate hikes will
\n likely be reduced and US dollar longs will get quickly unwound.<\/p>\n

EUR:<\/p>\n

On the EUR side, the ECB delivered a 25 bps rate hike
\n last Thursday<\/a>,
\n taking the deposit rate to 2.50% as widely expected. The more hawkish takeaway
\n came from the inflation outlook and the ECB’s growing concern that the Middle
\n East-driven energy shock could keep price pressures elevated for longer. The
\n ECB now sees headline inflation at 3.0% in 2026 and 2.5% in 2027, with both the
\n 2027 and 2028 inflation forecasts revised higher. <\/p>\n

The decision also came with
\n a stronger growth assessment, with the ECB upgrading its 2026 and 2027 growth
\n forecasts as the euro-area economy has proved more resilient than expected.
\n This gives policymakers somewhat more room to keep tightening despite the
\n inflation shock. <\/p>\n

The most important
\n development came after the decision. ECB sources indicated that
\n policymakers are already discussing another hike as early as the October<\/a> meeting if energy prices remain
\n elevated and inflation risks continue to broaden. Lagarde herself did not
\n pre-commit to October though, stressing a data-dependent and meeting-by-meeting
\n approach, so traders will keep focusing on the data and the Middle East
\n situation.<\/p>\n

\u00a0<\/p>\n

EURUSD TECHNICAL
\n ANALYSIS \u2013 DAILY TIMEFRAME<\/p>\n<\/p>\n

On the daily chart, we can
\n see that EURUSD<\/a>broke below the key 1.1560
\n support and extended the losses into new lows following the FOMC decision. The
\n natural target for the sellers should be the major support zone around the 1.14
\n handle. If the price gets there, we can expect the buyers to step in with a
\n defined risk below the support to position for a rally into new highs. The
\n sellers, on the other hand, will want to see the price breaking lower to
\n increase the bearish bets into new lows.<\/p>\n

EURUSD TECHNICAL
\n ANALYSIS \u2013 4 HOUR TIMEFRAME<\/p>\n<\/p>\n

On the 4 hour chart, we
\n have a downward trendline defining the bearish momentum. If we get a pullback,
\n the sellers will likely lean on the trendline with a defined risk above it to
\n keep targeting new lows. The buyers, on the other hand, will look for a break
\n higher to pile in for a rally into the 1.1560 resistance.<\/p>\n

EURUSD TECHNICAL ANALYSIS \u2013
\n 1 HOUR TIMEFRAME<\/p>\n<\/p>\n

On the 1 hour chart, there\u2019s
\n not much we can add here as the sellers will have a better risk to reward setup
\n around the downward trendline, while the buyers will need a break above it to open
\n the door for further upside. The red lines define the average daily range<\/a> for today.<\/p>\n

UPCOMING CATALYSTS<\/p>\n

On
\n Tuesday<\/a>, we have the Trump meeting with Gulf leaders and on Wednesday we get
\n the Flash Eurozone and US PMIs. <\/p>\n

This article was written by Giuseppe Dellamotta at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

FUNDAMENTAL OVERVIEW \u00a0 USD: The US dollar rallied across the board on Wednesday following the FOMC decision as the market interpreted as more hawkish than expected. The Fed hiked interest rates by…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-438371","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/438371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=438371"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/438371\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=438371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=438371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=438371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}