EUR/USD Stuck Below 1.1270 as French Yields Hit 2002 Highs — Fed-ECB Week Sets Up Break Toward 1.1350

EUR/USD traded at 1.1236 at 13:43 UTC on Wednesday, October 21, 2026, up 0.09% on the session after a European morning that saw the pair slip to 1.1219. The day’s range has been tight, running from 1.1219 to 1.1242, a span of 23 pips, against a Tuesday close of 1.1226 and a Tuesday range of 1.1205 to 1.1261. The pair was capped just above 1.1260 on Tuesday, eased toward 1.1220 into the European open on Wednesday, and has spent the U.S. morning grinding back toward its daily pivot at 1.1231.

The euro is trading in a narrow band because two forces are cancelling each other out. On the dollar side, the U.S. Dollar Index sits at 101.76 after touching 101.50 on Tuesday, its lowest since October 1, as falling Treasury yields and lower oil prices pulled the greenback off an 18-month high near 103 reached last week. That should be lifting the euro. On the euro side, France is in the middle of a fiscal and political crisis that has pushed the French 10-year government bond yield above 5% on Wednesday, the highest level since 2002, and widened the spread over German Bunds to 1.6 percentage points. That is pulling the euro back down every time it rallies.

This forecast runs on a single thesis. The French risk premium is now the ceiling on EUR/USD, and the dollar’s softness is the floor. Neither the Fed nor the ECB is offering a rate-differential catalyst before next week, because both central banks are on parallel hiking paths and markets price both to hold in October and hike in December. Until the October 28 Fed decision and the October 29 ECB decision land 24 hours apart, the pair is likely to trade between 1.1150 and 1.1270, with French headlines deciding which edge it tests.

The broader trend is down. EUR/USD hit 1.2042 on January 27, its 52-week high, and at 1.1236 it trades 6.7% below that level. On September 21, the pair stood at 1.1464, so it has lost 2.0% in a month. One year ago, a euro bought 1.1600 dollars, and the pair is down 3.1% year over year. The 2026 average so far is 1.1585, which puts the current rate 3.0% below the year’s mean. On October 12, the pair closed at 1.1155, near its lowest close of the past 52 weeks, and on October 14 it printed an intraday low of 1.1113 on the U.S. CPI release.

The euro is the underperformer among major currencies this week. Sterling trades at 1.3375 to 1.3392 against the dollar, and the dollar trades at 158.17 to 158.35 yen. The euro is down close to 1% in October alone, and the reason is not the dollar. It is France.

France’s 10-Year Breaks 5%, the Highest Since 2002

The single biggest driver of euro weakness is a sell-off in French government debt. The yield on France’s benchmark 10-year bond broke above 5% on Wednesday for the first time since 2002, extending a move that had already taken it to 4.96% earlier in the week. The spread between French and German 10-year yields, the market’s benchmark for French credit risk, surged to 1.6 percentage points, or 160 basis points. On Monday, that spread stood at 145 basis points, already at the top of its recent historic range, so it has widened 15 basis points in two sessions.

Credit default swaps confirm the move. French five-year CDS trade near 79 basis points, their highest since 2013. That is the price of insuring French government debt against default for five years, and it has risen alongside the bond spread rather than lagging it, which shows the stress is real rather than a technical squeeze in one part of the curve.

The fiscal arithmetic explains why markets are pricing France differently from Germany. French government debt stands at almost 120% of gross domestic product, compared with 66% in Germany. Paris is trying to push through large spending cuts to address that debt pile, and a budget standoff in parliament has stalled the process. A presidential election next year makes it harder still for the government to cut spending or raise taxes, the two measures that would restore investor confidence.

The European Central Bank has not offered a backstop. President Christine Lagarde has said that particular circumstances leave some countries more affected than others, with France a case in point, and that the primary solution lies in French fiscal policy. The ECB’s Transmission Protection Instrument, designed to counter disorderly bond market moves, has never been used and can only be activated when a sell-off is considered unjustified by fundamentals. With French debt near 120% of GDP and no budget agreement, markets do not expect the ECB to judge this sell-off as unjustified.

For EUR/USD, the French spread acts as a direct drag. When the spread widens, investors demand a higher risk premium to hold euro-denominated assets in general, not just French bonds, and that premium weighs on the currency. French stocks and bonds have been underperforming, and the euro has been lagging its major peers on the same days. The relationship is close enough that the OAT-Bund spread is now a better short-term predictor of euro direction than the U.S.-German yield differential.

A rating decision could add to the pressure. The last of the major credit rating agencies that has not yet downgraded France is due to review the country on Friday, October 23. A downgrade would complete the sweep and could widen the spread further, particularly if it lands on the eve of Saturday’s planned protests.

Curfews, Troops and Saturday’s Protests: The Political Risk Calendar

The fiscal crisis has a street dimension that is feeding directly into currency markets. Student protests that spread across France over the past several weeks turned violent last weekend, triggering looting and destruction in several cities. The government imposed partial curfews in major cities including Paris, Bordeaux and Nice, and President Emmanuel Macron addressed the nation, saying nothing justified the violence. The protests have targeted poor conditions in schools and hospitals and broader concerns about affordability.

The government is now preparing for another round. France will reinforce police with troops and mount a large security operation for protests planned on Saturday, October 24, as officials acknowledged failures in their response to last weekend’s violence. Prime Minister Sébastien Lecornu said there would be fresh curfews where the situation requires it, while ruling out a full curfew on entire cities.

That puts two French risk events back to back at the end of this week. Friday brings the rating review. Saturday brings protests with military support for police. Weekend events land when currency markets are closed, which means any escalation will show up as a gap at Monday’s open in Asia rather than as a gradual move. Positioning ahead of a weekend gap tends to compress ranges on Thursday and Friday, as traders reduce euro exposure rather than hold it through an event they cannot trade.

The near-term euro risk is skewed lower if the protests escalate or if curfews fail to restore order. Political and rating risks in France are a known factor weighing on the euro and are partly priced in, which is why EUR/USD has held above 1.1200 through the worst of last weekend’s headlines. A peaceful Saturday and a rating hold on Friday would remove some of that premium and let the pair test 1.1260 to 1.1270. A violent Saturday with expanded curfews would widen the OAT-Bund spread again and push the euro back toward 1.1180 to 1.1200.

There is a longer-term political risk under the immediate one. France faces a presidential election next year, and the current unrest raises the possibility of a fiscal policy shift that markets would price as more expansionary. That scenario is what keeps the French CDS at its highest since 2013 even on calmer days. For the euro, French political risk has moved from a background factor to a weekly driver, and it will stay there until a budget passes or the spread narrows below 140 basis points.

Germany offers a small offset. A German business survey released this week showed an uptick, but it has not been enough to overcome the drag from French assets on the single currency.

ECB at 2.50% and Holding: 93% to 97% Odds of No Move on October 29

The European Central Bank meets on October 28 and 29, with the rate decision due at 14:15 CET on October 29 and the press conference at 14:45 CET. The deposit facility rate stands at 2.50%, and the main refinancing rate at 2.65%, after hikes of 25 basis points each in June and September. The September increase on September 10 was the bank’s second since the U.S.-Iran war began. Markets price a 93% to 97% probability that the ECB holds at 2.50% next week, with market pricing for an October move down to 2 to 3 basis points from 12.5 basis points a month ago.

The inflation backdrop argues for patience rather than urgency. Eurozone consumer prices rose 3.8% in September from a year earlier, above expectations and up from 3.3% in August, which itself was the highest reading in three years. The driver is energy, with energy prices up 19% from a year earlier. The ECB’s inflation target is 2%, so headline inflation runs 1.8 percentage points above target. Inflation is expected to peak at 4% or above in early 2027 before falling quickly on base effects in the spring.

ECB chief economist Philip Lane signaled caution on Wednesday at a panel in Shanghai, suggesting a careful approach to further rate adjustments while energy inflation remains elevated. That points to a hold next week, with the next move deferred to December. Lagarde, Lane, Bundesbank President Joachim Nagel and executive board member Piero Cipollone are all scheduled to speak on Wednesday, and any hint that December is less certain would weigh on the euro.

Accounts of the September meeting, released October 8, showed policymakers saw inflation risks skewed to the upside but stressed keeping all options open and not signaling future moves. That language is consistent with a bank that will hike in December if energy prices stay high but does not want to commit in advance.

Markets now see an ECB hike in December and further tightening next year, a path that could be revised lower if the French crisis weighs on growth. A move to 2.75% in December is the consensus, with an additional hike to 3.00% in the first quarter of 2027 now forecast by some economists, favoring March 18 as the likely date with February 4 possible.

For EUR/USD, the ECB is unlikely to deliver a hawkish surprise next week. The press conference will matter more than the decision. If Lagarde confirms December, the euro gets modest support. If she leans on growth risks from France and energy, December pricing softens and the euro loses one of its few supports. The ECB decision lands one day after the Fed’s, which means the October 29 press conference will be read directly against what the Fed signaled on October 28.

Fed at 3.75%–4.00%: 16% for October, 89% to 94% for December

The Federal Reserve meets on October 27 and 28, with the decision at 2:00 p.m. ET on October 28. The federal funds target range sits at 3.75% to 4.00% after September’s unanimous quarter-point hike. Futures price a 16% probability of a hike next week, down from a peak near 50% after the September CPI report on October 14, and a December probability between 89% and 94%.

The parallel with the ECB is close. Both central banks hiked in September. Both are priced to hold in October. Both are priced to hike in December. That symmetry is why the rate differential is not driving EUR/USD this month. The gap between the Fed’s upper bound at 4.00% and the ECB deposit rate at 2.50% stands at 150 basis points, and both are expected to move by 25 basis points in December, which would leave the gap unchanged.

U.S. inflation data supports the Fed’s path. September consumer prices rose 3.7% from a year earlier, above the 3.6% estimate. The Fed’s preferred gauge was softer: August core PCE rose 3.0% year over year against a 3.3% forecast, with headline PCE at 3.4% against 3.7% expected. September PCE arrives at 8:30 a.m. ET on October 29, the morning of the ECB decision, which stacks three events into a 36-hour window: the Fed on Wednesday afternoon, U.S. PCE on Thursday morning, and the ECB on Thursday afternoon.

Fed Chair Kevin Warsh cooled October hike pricing on October 16 by declining to make next week the decision point, which weakened the dollar and helped the euro rebound off the October 14 low at 1.1113. He has not softened his broader message that inflation is too high and too many price categories are rising faster than 3%. Several Fed officials have signaled the bank can wait until December.

The dollar has benefited from more than rate expectations this month. Safe-haven demand tied to the U.S.-Israeli war with Iran drew money into the dollar last week, and U.S. energy independence gave the currency relative insulation from the oil shock that is hurting Europe. Falling Treasury yields during the AI-stock selloff then pulled the dollar back from its 18-month high near 103.

For EUR/USD, the Fed matters through its guidance on what comes after December. A press conference that frames December as the last hike of the cycle would weaken the dollar against the euro, because the ECB would then be seen hiking later into 2027 while the Fed stops. That divergence is the single most powerful upside catalyst for the euro in the next two weeks.

Yield Spreads: U.S. 10-Year at 5.12%, Bunds Near 3.4%

The U.S. 10-year Treasury yield rose 1 basis point to 5.12% on Wednesday, reversing part of Tuesday’s 6-basis-point drop to 5.08%. With the French 10-year above 5% and the French-German spread at 1.6 percentage points, the German 10-year Bund yield sits near 3.4%. That puts the U.S.-German 10-year spread near 170 basis points in favor of the dollar.

The spread is wide, but it has not been widening, and that matters for direction. When U.S. yields fell on Tuesday on weak housing data and lower oil, the dollar fell with them, and EUR/USD rose to 1.1261. When U.S. yields recovered on Wednesday, the euro gave back part of the move. The U.S.-German differential is setting the pace of the pair within its range, while the French spread is setting the ceiling.

The more important spread for the euro right now is inside the eurozone. A 160-basis-point gap between French and German yields means investors are pricing meaningful credit risk into the second-largest economy in the currency bloc. That fragmentation is a euro-negative factor in itself, because it raises the question of whether the ECB can set a single policy rate that works for both Berlin and Paris. Ongoing strains in eurozone government bond markets have been weighing on sentiment even on days when German data improves.

U.S. housing data released Tuesday pulled Treasury yields lower. September housing starts fell 5.2% to a 1.221 million annual rate, short of 1.30 million expected, and pending home sales dropped 7.3% to an index reading of 66.0, the lowest since the series began in 2001. That data fed directly into the dollar’s slide to 101.50 and the euro’s push to 1.1261. Weak U.S. housing is one of the few factors working for the euro this week.

Wednesday’s 20-year U.S. Treasury bond auction at 1:00 p.m. ET is the next yield catalyst. A weak auction would push U.S. yields higher and the euro lower. A strong one would extend the dollar’s softness.

The yield picture adds up to a euro that cannot rally hard on rate differentials alone. The U.S.-German spread favors the dollar, the French spread penalizes the euro, and neither central bank is expected to change the differential before December. The only path to a sustained euro rally runs through a narrower French spread or a dovish Fed signal, and neither is in place yet.

Oil at $110 Brent: The Energy Shock Hits Europe Harder

Oil prices are a structural headwind for the euro that the dollar does not share. Brent crude traded back above $110 on Wednesday, consolidating around $111.80 in early trading after Iran said there would be no talks with Washington until its demands were met. On Tuesday, Brent spiked to a five-month high of $111.99 on tanker attacks, a mine strike near the Strait of Hormuz and claims of strikes on Saudi energy infrastructure, then settled at $108.79 after Iran and Pakistan held mediation talks. West Texas Intermediate traded at $99.69 overnight before falling to $96.86 in U.S. hours.

The asymmetry between Europe and the U.S. on energy is central to the euro’s weakness. The United States is a net energy exporter, and higher oil prices improve its terms of trade even as they lift inflation. The eurozone imports most of its energy, and higher oil prices worsen its trade balance and transfer income abroad. That is why the dollar has benefited from relative insulation during the Iran conflict while the euro has not.

The energy shock is visible in eurozone inflation. Energy prices are up 19% from a year earlier, and they are the main reason headline inflation reached 3.8% in September. The ECB has responded with two rate hikes since June, but rate hikes do not reduce oil prices. They only slow the economy, which is the opposite of what a fiscally stressed France needs.

Eurozone sentiment shows the damage. The ZEW Economic Sentiment Index for the eurozone fell to 18.5 points from 25.8, well below the 24.2 forecast. That 7.3-point drop reflects investor concern that energy costs and tight policy will slow growth through the winter. Weak sentiment data hampers any euro recovery, because it raises doubts about whether the ECB can follow through on December if growth deteriorates.

The oil-euro link works in both directions. A credible U.S.-Iran diplomatic breakthrough that sends Brent below $100 would be one of the strongest bullish catalysts for EUR/USD, because it would improve the eurozone’s trade balance, ease inflation and reduce the growth risk that weighs on the ECB. Qatari and Pakistani mediation remains active, and a Qatari delegation arrived in Tehran this week. A sustained move above $112 Brent would push the euro toward the bottom of its range.

On Tuesday, the EUR/USD rise to 1.1261 lined up with Brent’s retreat from $111.99 to $108.79. On Wednesday, the slip to 1.1219 lined up with Brent’s return above $110. That intraday correlation makes oil headlines a direct input into the pair.

October’s Path: 1.1113 Low, 1.1261 High, a Range Inside a Downtrend

The daily price history for October shows a pair trapped in a 150-pip band. EUR/USD opened the month near 1.1254 on October 2, traded a high of 1.1286 that day, and reached 1.1277 on October 6 before rolling over. On October 7, it fell 0.56% to 1.1197. It closed at 1.1155 on October 12, down 0.42% on the day, its lowest close of the past 52 weeks.

The low came on October 14, the day of the U.S. CPI release, when the pair dropped to an intraday 1.1113 before closing at 1.1157, down 0.38%. The rebound was sharp. On October 15, EUR/USD rose 0.56% to 1.1220, its biggest one-day gain of the month, as Fed officials signaled patience. On October 16, it added 0.18% to 1.1240, with a high of 1.1269, after Warsh declined to make October the decision point. On October 19, it fell 0.25% to 1.1212, with a low of 1.1182, as French protests turned violent. On October 20, it rose 0.12% to 1.1226, with a high of 1.1261, as the dollar index slid to 101.50.

That sequence defines the range. The floor sits at 1.1113 to 1.1157, tested on October 12 and 14. The ceiling sits at 1.1261 to 1.1286, tested on October 2, 6, 16 and 20. From the October 14 low to Tuesday’s high, the pair rallied 148 pips, and it has spent the last four sessions unable to clear 1.1270.

The broader context is a downtrend. From the January high of 1.2042, the pair has fallen 6.7%. From the September 21 level of 1.1464, it has fallen 2.0%. The September decline coincided with the Fed’s first hike since 2023 and the oil spike, and October’s range has formed below that drop without reclaiming any meaningful part of it.

The pair trades below its 100-day simple moving average, and the bearish technical picture prevails as long as it stays there. It has consolidated above the upper boundary of a descending channel that guided the September decline, and buyers have established support near 1.1190. A bullish crossover on the stochastic oscillator suggests a near-term recovery is possible.

October’s behavior suggests a market that has found a temporary equilibrium between dollar softness and French stress. The pattern of higher lows since October 14, at 1.1113, then 1.1182, then 1.1205, then 1.1219, shows buyers stepping in earlier on each dip. The pattern of equal highs near 1.1260 to 1.1270 shows sellers defending the same ceiling. That geometry is a compression, and compressions resolve on catalysts. The catalysts arrive next week.

Technical Levels: 1.1215 Support, 1.1245 to 1.1270 Resistance

The level map around 1.1236 is dense on both sides. Wednesday’s daily pivot sits at 1.1231, and the pair is trading a few pips above it. The first support is 1.1215, the S1 level from Tuesday’s session, followed by Wednesday’s low at 1.1219 and Tuesday’s low at 1.1205. Below that, 1.1190 is the support zone buyers have defended through the past week, and 1.1182 is Monday’s low. The next layer is 1.1152 to 1.1157, the October 12 and 14 closing lows, and then 1.1113, the October 14 intraday low and the bottom of the month’s range.

On the upside, 1.1242 is Wednesday’s high. Resistance at 1.1245 is the level buyers have not overcome after several days of gains, and 1.1248 is the R1 level from Tuesday’s session. The 1.1250 round number sits just above. The cluster from 1.1260 to 1.1270 is the October ceiling, including Tuesday’s 1.1261 high and the October 16 high at 1.1269. Above that, 1.1277 and 1.1286 are the early-October highs. A break above 1.1286 would put 1.1350 in view, where resistance from the September breakdown sits, and then 1.1365, the target for a confirmed recovery.

Distances from 1.1236 define the near-term asymmetry. The ceiling at 1.1270 sits 34 pips above. The floor at 1.1150 sits 86 pips below. The October low at 1.1113 sits 123 pips below, a 1.1% decline. On the upside, 1.1350 sits 114 pips above, a 1.0% gain, and 1.1365 sits 129 pips above, a 1.1% gain.

The technical signals are split. The pair trades below its 100-day SMA, which keeps the bearish structure intact on the daily chart. The consolidation above the descending channel’s upper boundary and the bullish stochastic crossover favor a near-term bounce. A daily technical summary shows 10 sell signals, 6 neutral and 6 buy, which nets to a neutral reading.

The levels that would change the picture are clear. A daily close above 1.1286 would break the October range and the early-month highs, and it would open the path toward the 100-day SMA and 1.1350. A daily close below 1.1182 would confirm that the higher-low pattern has failed and would expose 1.1150 and the October low. Between those levels, the pair is range-bound, and range trading from 1.1190 to 1.1260 is the dominant strategy until next week’s central bank decisions.

Positioning Into the Weekend: Rating Review Friday, Protests Saturday

The rest of this week is a sequence of event risks that will shape EUR/USD into the Fed and ECB. Wednesday brings speeches from Lagarde, Lane, Nagel and Cipollone, plus the U.S. 20-year Treasury auction. After the U.S. close, Meta Platforms and Tesla report earnings, and those results will drive global risk sentiment into Thursday. A strong equity reaction weakens the dollar’s safe-haven bid and supports the euro. A weak one strengthens the dollar.

Thursday brings U.S. weekly jobless claims. Friday brings U.S. flash PMI readings for October and the University of Michigan consumer survey. Friday also brings the French rating review. Saturday brings the protests in France, with troops supporting police and curfews possible.

That sequence means the euro will likely compress into Friday’s close. Traders tend to reduce exposure to a currency ahead of a weekend political event they cannot trade, and that reduction usually shows up as a narrowing of daily ranges on Thursday and Friday, followed by a gap on Monday. The direction of the gap depends on what happens in France over the weekend.

The base case for the weekend is that EUR/USD holds above 1.1200. Political and rating risks are partly priced in, the dollar is soft, and the pair has held 1.1200 through last weekend’s violence and curfews. Downside risk rises if protests escalate and curfews fail, which could produce a short dip toward 1.1180 or below at Monday’s open. Relatively stable trading into next week is the most likely path, with downside risk tied to French developments rather than to U.S. data.

Next week is dense. The Fed decides on October 28. U.S. core PCE prints on October 29. The ECB decides on October 29. The Bank of Japan decides between October 28 and October 30. U.S. payrolls follow on November 6. EUR/USD has rarely faced a cluster of this size, and the pair’s range has compressed in anticipation.

The positioning read is that neither side is willing to commit before those events. The euro has support from a soft dollar and a December ECB hike. It has resistance from French fiscal stress and oil. The OAT-Bund spread at 160 basis points and the dollar index at 101.76 are the two numbers to watch into Friday.

Forecast Scenarios: 1.1150–1.1270 Base, 1.1365 Upside, 1.1050 Downside

The base case through the October 28 Fed and October 29 ECB decisions is a range between 1.1150 and 1.1270. Both central banks are priced to hold in October and hike in December, which keeps the rate differential stable. The dollar’s slide from 103 to 101.76 provides a floor for the euro, and the French spread at 160 basis points provides a ceiling. Within that range, the higher-low pattern since October 14 favors tests of the upper half, 1.1240 to 1.1270, on any day without a French escalation.

The bullish scenario needs a catalyst from one of three sources. A Fed press conference on October 28 that frames December as the final hike of the cycle would weaken the dollar and push EUR/USD through 1.1286. An ECB press conference on October 29 that confirms December and signals further tightening into 2027 would widen the policy gap in the euro’s favor. A narrowing of the French-German spread below 140 basis points, after a peaceful weekend and a rating hold, would remove the euro’s main drag. Any two of those would carry the pair to 1.1350, 1.0% above current levels, and 1.1365, 1.1% above. A credible US-Iran deal sending Brent below $100 would add a fourth catalyst and could extend the move toward the 100-day SMA.

The bearish scenario starts with France. A Saturday of violent protests, expanded curfews and a rating downgrade on Friday would widen the OAT-Bund spread beyond 170 basis points and push French CDS higher. EUR/USD would gap lower on Monday, through 1.1182 and toward 1.1150, then test the October low at 1.1113, 1.1% below current levels. A hawkish Fed on October 28 that leaves hikes open into 2027, combined with an ECB that leans on growth risks, would push the pair through 1.1113 and toward 1.1050, a 1.7% decline from 1.1236. A Brent spike above $112 would reinforce that path.

The probability weighting favors the range. French risks are partly priced in, both central banks are expected to move in parallel, and the dollar’s recent softness gives the euro a floor near 1.1180 to 1.1200. A break out of the range requires either a French escalation or a central bank divergence, and the earliest the divergence can come is October 28. Until then, the 1.1190 to 1.1260 band is the operating range, with French weekend risk skewing the tail lower.

Verdict: Neutral With a Downside Tilt Below 1.1270

EUR/USD at 1.1236 is neutral with a downside tilt. The pair sits inside a 1.1113 to 1.1286 October range, with buyers defending higher lows at 1.1182, 1.1205 and 1.1219 and sellers holding the 1.1260 to 1.1270 ceiling on every test since October 16. The dollar index at 101.76, off an 18-month high near 103, gives the euro a floor, and that floor has held through last weekend’s violence in France and Wednesday’s spike in French yields.

The case for the ceiling is concrete. France’s 10-year yield broke above 5% on Wednesday for the first time since 2002, the spread over Germany widened to 160 basis points from 145 on Monday, and French five-year CDS trade near 79 basis points, their highest since 2013. French debt stands at almost 120% of GDP against 66% in Germany. The ECB has signaled the solution lies in French fiscal policy, not in its own intervention tools. Troops will support police at protests planned for Saturday, after a rating review on Friday. Brent near $110 hurts the eurozone’s trade balance more than it hurts the U.S., and the eurozone ZEW sentiment index fell to 18.5 from 25.8.

The case for the floor is just as concrete. The Fed and ECB are both priced to hold in October and hike in December, which keeps the 150-basis-point policy gap stable. The dollar has fallen 1.2% from its October high, U.S. housing data is weakening, and the U.S. 10-year yield has eased from above 5.2% in September to 5.12%. Eurozone inflation at 3.8% keeps the ECB on track for December.

The levels decide the call. A daily close above 1.1286 opens 1.1350 and 1.1365 and turns the bias bullish. A daily close below 1.1182 opens 1.1150 and the 1.1113 October low and confirms the downtrend. Between those levels, the range holds into the October 28 Fed decision and the October 29 ECB decision, and the French spread is the variable that decides which edge breaks first.

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