{"id":441018,"date":"2026-10-28T19:40:14","date_gmt":"2026-10-28T12:40:14","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/eur-usd-nears-key-1-1067-swing-level-ahead-of-fed-and-ecb-decisions-whats-next-441018\/"},"modified":"2026-10-28T19:40:14","modified_gmt":"2026-10-28T12:40:14","slug":"eur-usd-nears-key-1-1067-swing-level-ahead-of-fed-and-ecb-decisions-whats-next","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/eur-usd-nears-key-1-1067-swing-level-ahead-of-fed-and-ecb-decisions-whats-next-441018\/","title":{"rendered":"EUR\/USD nears key 1.1067 swing level ahead of Fed and ECB decisions. What’s next?"},"content":{"rendered":"
\n

USD:<\/p>\n

The Federal Reserve is widely expected to keep
\n interest rates unchanged. With no new projections or dot plot expected at this
\n meeting, changes in Fed Chair Warsh’s or statement’s language will be the main
\n focus.<\/p>\n

Despite higher September inflation data strengthening
\n the case for further tightening, key Fed members have signalled little urgency
\n to deliver a back-to-back rate hike in October. A hawkish hold remains the base
\n case as the debate centres around the timing and extent of further tightening
\n rather than direction.<\/p>\n

Warsh is expected to reiterate that monetary policy is
\n not sufficiently restrictive and that additional tightening is warranted. He’s
\n also seen reaffirming the commitment to price stability but cautioning against
\n overreacting to individual data points.<\/p>\n

Markets are already pricing an 80% chance of a rate
\n hike in December, so the focus will be more on the 2027 outlook. Traders see
\n roughly two more rate hikes next year, with the first fully priced in move in
\n April.<\/p>\n

A surprise rate hike would trigger strong risk-off
\n flows. The US dollar and Treasury yields might initially react positively to
\n the decision, but I think the reaction will be quickly faded as growth concerns
\n should intensify amid falling stock markets.<\/p>\n

A largely neutral outcome that avoids signalling an
\n imminent rate hike could be taken as dovish and trigger a correction in the US dollar.
\n I would also expect the same reaction but with less magnitude in case the Fed
\n just delivers on the hawkish hold expectations, avoiding major surprises.<\/p>\n

EUR:<\/p>\n

On the EUR side, the ECB is
\n widely expected to keep rates unchanged, while maintaining its data-dependent,
\n meeting-by-meeting approach. Inflation accelerated to 3.8% in September, driven
\n by energy prices, while core inflation showed more limited increases. <\/p>\n

Rising energy costs and the
\n risk of second-round inflation effects remain hawkish risks but increased growth
\n concerns and tighter credit conditions argue for caution. Markets will focus on
\n any signals about further tightening, with the December rate hike probability
\n standing around 68%.<\/p>\n

France is likely to
\n dominate the press conference, with traders looking for clues on whether
\n widening sovereign spreads and fiscal uncertainty could prompt a more dovish
\n ECB stance or potential intervention through the Transmission Protection
\n Instrument (TPI). A hawkish surprise is unlikely in the current context.<\/p>\n

The next key catalyst for
\n the euro should be the vote on France\u2019s 2027 state budget which is scheduled
\n for November 3. This vote concerns the revenue section of the budget. The full
\n budget vote is scheduled for November 17.<\/p>\n

The vote matters as a test
\n of the government’s ability to deliver fiscal consolidation. A smooth passage
\n would offer some relief and could give the euro a boost, while a rejection or
\n major concessions that weaken the deficit-reduction plan could put further
\n pressure on French bonds and the euro. <\/p>\n

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

On the daily chart, we can
\n see that EURUSD<\/a>is approaching a key swing
\n level around 1.1067. If the price gets there, we can expect the buyers to step
\n in, with a defined risk below the level, to position for a correction into the
\n downward trendline around the 1.15 handle. The sellers, on the other hand, will
\n look for a break lower to increase the bearish bets into the 1.08 level next.<\/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 we can expect the sellers to lean on the trendline, with a defined risk above
\n it, to keep pushing into new lows. The buyers, on the other hand, will look for
\n a break higher to increase the bullish bets into new highs.<\/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 trendline, while the buyers will look for the price to come into the
\n key swing level or a break above the trendline. The red lines define the average daily range<\/a> for today.<\/p>\n

UPCOMING CATALYSTS<\/p>\n

Today<\/a> we have the FOMC rate
\n decision. Tomorrow, have the ECB rate decision and we get the US GDP report,
\n the US PCE and the latest US Jobless Claims figures. On Friday, we conclude the
\n week with the Eurozone GDP and the US Employment Cost Index. <\/p>\n

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

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