FX.co ★ UFCworriers | EUR/USD

The Euro (EUR) is up against the US Dollar (USD) today and is on course for its first weekly gain in well over a month, driven by a reversal in US Treasury yields and a dovish tone from Federal Reserve members. However, EUR/USD is struggling around 1.1240, where it has hit a ceiling twice in the past two days, and is set to approach 1.1220 ahead of the release of the latest September Eurozone inflation report. Preliminary figures show the annual increase in the Eurozone Harmonised Index of Consumer Prices (HICP) quickened to 3.8% in September, from 3.2% in August, on the back of higher oil prices. The Core HICP rose slightly to 2.5%, up from 2.4% last month. The US Dollar remains fairly soft in the past few days amid falling US rates and dovish remarks from officials, despite high US producer price inflation and strong retail sales seen on Wednesday. Fed Chairman Kevin Warsh spoke at the IMF meeting in Bangkok earlier today and expressed optimism about the economy's strength. Warsh reiterated the Fed's resolve to tackle inflation but offered no clues on the timing or magnitude of the monetary tightening process. The EUR/USD currency pair is trading at 1.1226. At the same time, overall bearish sentiment remains, but the impulsive rally from its 17-month bottom of 1.1113 earlier this week suggests a bullish correction may be in the cards for the pair. Technical indicators support this view, as the 4-hour Relative Strength Index (14) is stabilising above the crucial 50 mark, while MACD remains above the zero line with a positive histogram. Nevertheless, for bulls to stay in control, they should close above today's high of 1.1240 and the October 2 high of 1.1290. As for resistance, bears would first need to break the intra-day low of 1.1190, followed by an important structural support level at 1.1113 (the low of October 14). A violation below this level would invalidate the bullish outlook and raise pressure on the late May 2025 lows around 1.1050.