Interpretation of the EUR/USD Analysis for November 12. The Flat Is Over — and So Is the Euro's Luck

The EUR/USD pair continued its downward move on Wednesday, even though no new economic or geopolitical news arrived. Recall that the day before, the U.S. released a "truncated" CPI report signaling to markets that consumer prices are rising faster than expected. In reality, that report did not change the Federal Reserve's policy outlook: the Fed was already ready to tighten in December, and the market had known that for weeks. The probability of a December hike did rise, but probability is not the same as an actual shift in the monetary course. Whether the odds are 80% or 95%, the decision is effectively priced in in both cases. Thus, the dollar had grounds to strengthen on Tuesday, and on Wednesday we saw another, in our view, illogical move —again in the dollar's favor. The market ignored the euro-area CPI released a week earlier, solid euro-area GDP prints, and even the European Central Bank's prior tightenings for months. Dollar strength remains anomalous and, in many respects, irrational.

Technically, the EUR/USD pair has left the sideways channel 1.1115–1.1261 — and it did so through the boundary few expected. The euro's decline can continue, and nobody seems interested in buying it right now.

On the 5-minute timeframe, two sell signals formed on Wednesday. First, the pair broke the 1.1154–1.1165 zone, then the 1.1115 level. Traders could have opened short positions in the morning and closed them by the end of the day for roughly 50 pips of profit. Today the decline may continue.

The latest COT report is dated November 3. On the weekly timeframe it clearly shows that non-commercial traders' net position remains bearish and has fallen significantly in 2026 due to geopolitical events. Over the past eight months traders have been cutting euro exposure in favor of the US dollar. Donald Trump's policies have not changed, which likely prevents the dollar from counting on long-term structural gains.

We still do not see fundamental factors that justify a sustained strengthening of the US currency. The Middle East war made the dollar temporarily extremely attractive, and the Fed's policy stance surprised the dollar for the second time this year. In the long run the euro could fall as low as $1.08 (trendline), yet the longer-term uptrend remains relevant. Nevertheless, in recent months the market has considered only factors positive for the dollar and ignored everything else.

The positions of the Ichimoku red and blue lines indicate a bear advantage. Over the last reporting week the number of longs among the "Non-commercial" group fell by 1,300 while shorts rose by 12,600. Accordingly, the net position decreased by another 13,900 contracts during the week.

On the hourly timeframe, the EUR/USD pair has resumed its three-month downtrend without a single meaningful correction. On the daily and weekly timeframes, the chances of a strong, sustained trend remain high. However, for the euro to rise, it must be bought. Over the past three months, the market has shown no willingness to buy the euro.

For November 12 we highlight the following levels for trading — 1.0949, 1.1006, 1.1115, 1.1154–1.1165, 1.1261–1.1274, 1.1362–1.1368, 1.1461–1.1473, 1.1536–1.1542, 1.1585, 1.1657–1.1665, as well as the Ichimoku Senkou Span B line (1.1190) and Kijun-sen (1.1160). The Ichimoku indicator lines may shift during the day, so account for this when determining trade signals. Remember to move your Stop Loss to breakeven if the price moves 15 pips in the correct direction. This will protect against possible losses if the signal proves false.

On Thursday, no important events are scheduled in the US, while in the EU, ECB President Christine Lagarde will speak. It is unlikely Lagarde can throw a lifeline to the euro, even if she announces five more rate hikes.

Traders can consider targets for short positions near 1.1006, since the price has closed below 1.1115. On a bounce from 1.1006, one can consider a target for long positions at 1.1115.