Intraday Strategies for Beginner Traders on the Euro and Pound for October 15

The dollar surged sharply against all major currencies yesterday—most strongly against the euro and the pound—but that advantage has vanished today. EUR/USD returned to 1.1212 and GBP/USD to 1.3237, i.e., back to the levels where yesterday began. Overnight, both pairs moved up significantly, hit the boundaries of their range, and pulled back slightly.

Yesterday Germany released its September producer-price index, which rose 1.9% month-on-month versus a 0.7% forecast and 0.9% previously. Such a print usually supports the euro because companies' cost increases eventually pass through to retail prices, giving the European Central Bank reason not to ease. But yesterday the market focused on US inflation, and Germany's PPI was sidelined. It now has a chance to be priced in. With the ECB's deposit rate at 2.50% and its October 29 meeting approaching, markets still expect a final hike to 2.75% in December.

About yesterday's US inflation: headline CPI for September rose 0.6% month-on-month after 0.4% in August and accelerated to 3.7% year-on-year from 3.4%. Both values matched consensus, so there was no large headline surprise. Fuel was the main driver: gasoline jumped 9.1% month-on-month and accounted for more than half of the monthly rise. The core CPI (excluding food and energy), which reflects the persistent part of price pressure, surprised to the upside: +0.3% month-on-month versus +0.2% expected and 2.6% year-on-year versus 2.4% previously. That core print is what drove dollar buying yesterday.

For the Federal Reserve, this data set gives no reason to ease the tone. The federal funds rate stands at 3.75%–4.00%; a hike on October 28 remains unlikely, but a December move to 4.00%–4.25% looks very probable — the market prices it at roughly an 80% chance. Recall prior comments from officials: Lorie Logan said September's move was only the first step and that returning to 2% could require another ~50 bps; Neel Kashkari expects another hike in 2026 and one in 2027; Tom Barkin warned the "payback" from inflation is still to come. Yesterday's prints reinforced those views and explain the sharp dollar jump immediately after the release.

Today the picture has reversed. After US bond yields fell, the dollar lost yesterday's edge versus the euro and pound. Ten-year yields had approached 5.31%, so any drop quickly reduces demand for the dollar. Until yields move back up, the dollar will lack fresh impulse, which is why both pairs are sitting near the upper edges of their ranges.

In the first half of the day, the euro faces two releases: Eurozone industrial production and Italy's inflation. Industrial production shows whether factories are ramping up output and gauges the real sector's health. If the numbers beat forecasts, they will confirm the picture business surveys paint. EUR/USD should continue higher provided both prints surprise to the upside, allowing the pair to extend the move that began with the yield decline. If the figures disappoint, the euro will quickly revert to dependence on the dollar.

For the euro, the range between breakout points is fairly wide — 48 pips, from 1.1193 to 1.1241. Price at 1.1212 sits inside it closer to the upper half: 19 pips above the lower boundary and 29 pips below the upper. Overnight, the pair climbed almost to 1.1241, failed to close above it, and pulled back, reminding us that a single touch is insufficient. A breakout above 1.1241 opens the way to 1.1275 and 1.1310; for that to happen, the euro needs strong eurozone industrial data, high Italian inflation, and further declines in US yields. A break below 1.1193 would lead to 1.1156 and 1.1117, and that scenario will revive if yields rise and the dollar recovers yesterday's strength. I believe both outcomes now require an external catalyst, so between them the prudent approach is to wait patiently for a confirmed close.

For the pound, the range is narrower relative to price — 34 pips, from 1.3222 to 1.3256. Price at 1.3237 lies 15 pips above the lower boundary and 19 pips below the upper. Overnight, the pair also rose slightly above 1.3256 by only a couple of pips and failed to hold. A break above 1.3256 leads to 1.3282 and 1.3307, and after strong UK data, this scenario has supporting arguments because the economy does not appear weak. A break below 1.3222 leads to 1.3202 and 1.3183, which would require a return of dollar strength, for example, via higher yields. Distances to the first targets are 26 pips up and 20 pips down, so after a confident close beyond the level, the move could be quick.

For the euro, two reversion reference levels stand out: 1.1238 and 1.1195. The upper one sits three pips below the breakout point at 1.1241 and 26 pips above the current price. If the pair rises to 1.1238, bumps into 1.1241 and quickly falls back, I would consider selling, with a protective stop sensibly placed above 1.1275. But with such a small gap, special caution is required — three pips is routine market noise, and on the first touch you cannot tell whether a breakout has started or it is merely a spike to the boundary. If price clears 1.1241 and closes above it, that is a confirmed breakout and selling there is not allowed. The lower reference 1.1195 lies only two pips above the breakout point 1.1193 and 17 pips below the current price. A rebound up from 1.1195 gives a buying idea, but the room to a stop below 1.1193 is minimal, so I would skip the first reaction in that zone and wait for the picture to clarify.

For the pound, the situation is unusual because the upper reversion reference 1.3256 coincides with the buy breakout point. For that reason, a mere touch of the level says nothing on its own. If price moves above 1.3256, reaches 1.3282 and closes convincingly, that is a breakout and selling is not allowed. If it pokes above and quickly returns below 1.3256—as happened overnight—the reversion trade works, and I would consider selling with a stop above 1.3282. The lower reference 1.3221 sits just one pip below the breakout point 1.3222 and 16 pips below the current price, and 19 pips above the first target of the breakout scenario at 1.3202. If the pair drops to 1.3221, quickly returns above, and re-enters the range, buyers get a rebound idea with a stop below 1.3202. But one pip is very small, and you can distinguish such a reversion from the start of a real downside breakout only by whether price closes beyond the level.