EUR/USD continued to rise on Friday but reversed in favor of the US dollar toward the end of the day and consolidated below the 127.2% retracement level at 1.1220. Thus, the new week begins with renewed bearish pressure toward the 1.0181–1.1086 support level. Consolidation above 1.1220 would favor the euro and a resumption of the upward move toward the 100.0% retracement level at 1.1325.

The wave structure on the hourly chart remains bearish. The latest completed downward wave broke below the previous low, while the new upward wave has so far broken above the previous high. Following the September FOMC meeting, traders expect at least one more monetary policy tightening before the end of the year and another next year. This factor continues to provide strong support for the US dollar, while other factors have become largely irrelevant. The bears are gaining momentum, which is also helping the dollar appreciate.

The news background on Friday was relatively weak, but it allowed the bears to halt the bulls' tentative attempts to establish an upward trend. The final estimate of eurozone inflation released in the morning showed no deviation from the preliminary estimate. As a result, traders did not react to the report. In the second half of the day, the United States released its industrial production report, which showed a 0.7% month-on-month increase in September, compared with market expectations of 0.4%. Therefore, the bears had valid reasons to resume their attacks during the final quarter of the trading day. Overall, Friday's trading was relatively calm, and the bulls failed to strengthen their advantage from the preceding days.

On Monday, however, the bears launched another attack, even though no new reports or developments had emerged so far. There was no news from the Middle East, Ukraine, the European Union, or the United States. The only development worth noting is the widespread unrest in France, which has escalated into a nationwide uprising. The police and security forces have been unable to contain the demonstrators, who are vandalizing and destroying everything in their path. The protests are linked to another increase in the cost of living and possible tax hikes. Thus, the euro is declining again, even though the dollar has gained no new reasons to strengthen.

On the 4-hour chart, following the formation of a fifth bullish divergence, EUR/USD reversed in favor of the euro and rose to the 127.2% Fibonacci level at 1.1221. Consolidation above this level would open the way for a rise toward 1.1325. However, on Monday, the pair consolidated below 1.1221, allowing traders to return quickly to the 161.8% retracement level at 1.1088. No developing divergences are currently visible.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders closed 20,091 Long positions and opened 18,150 Short positions. Speculators currently hold a total of 223,000 Long positions and 360,000 Short positions. The bears remain in control, and the euro continues to be sold more often than it is bought. This is attributable to the challenging geopolitical situation in the Middle East and Kevin Warsh's intention to bring inflation down. The market still believes that inflation will be reduced to 2% by any available means.

Overall, large market participants continue to show considerable interest in the euro over the long term. Global events of various kinds, which have been plentiful in recent years, undoubtedly affect investor sentiment and put pressure on risk-sensitive currencies. Moreover, 2026 could set a record for the number of events that could not have been predicted in advance. Traders therefore have little choice but to adapt to changing conditions as they unfold.

Economic Calendar for the United States and the European Union:

On October 19, the economic calendar contains no scheduled releases. The economic news background will have no impact on market sentiment on Monday.

EUR/USD Forecast and Trading Advice:

Long positions can be considered if the pair consolidates above 1.1220 on the hourly chart, with a target of 1.1325. Short positions can be considered if the pair consolidates below 1.1220, with the 1.1081–1.1086 support level as the target.

The Fibonacci grids are drawn from 1.1325 to 1.1712 on both the hourly and 4-hour charts.