Euro Breaks to a 17-Month Low of 1.1161 as the Dollar Extends Its Four-Week Rally
Weekly Forex Outlook | 12–16 October 2026
Euro Breaks to a 17-Month Low of 1.1161 as the Dollar Extends Its Four-Week Rally
- Weekly bias
- US dollar higher
- Buy USD/CAD near 1.4215; sell EUR/USD near 1.1255
- Expected volatility
- High
- US CPI and 14 central bank speakers
- Key event
- US CPI
- Wed 14 Oct, 16:30 GST
- Key pivot level
- 1.1161
- EUR/USD 17-month low; a break opens 1.1100
Market Overview
The US dollar rose for a fourth consecutive week. The Dollar Index reached 102.53 on Monday, its highest level since April 2025 and above its 200-week average, before easing to 102.06 on Friday as Treasury yields cooled. EUR/USD fell for a fifth week, from 1.12557 to 1.11973, after touching a 17-month low of 1.11610 on French fiscal concerns. GBP/USD slipped to 1.32242 for a fourth weekly loss, USD/JPY edged up to 158.270 within a 157.437–158.511 range, and AUD/USD ended a four-week losing streak at 0.69842 but was turned back below 0.7000 again. USD/CAD held near a 19-month high at 1.42559 after a severe Canadian jobs report, and USD/CHF touched 0.83466, its highest since May 2025, before closing at 0.82944.
The rally rests on a hawkish Federal Reserve. The minutes of the September meeting showed unanimous support for the hike to 4.00%, with most officials expecting another increase by year-end, and markets price just over 25 basis points of tightening by December. September payrolls of only 29,000 did not change that view. US September CPI on Wednesday is the defining event: consensus is +0.6% m/m and 3.6% y/y, up from 3.4%, with core near +0.2% m/m. Fourteen central bank speakers, closing with Fed Chair Warsh on Friday, add to event risk. Monday opens thin, with Tokyo closed for Sports Day and the US bond market shut for Columbus Day.
Our bias favours the US dollar: buying USD/CAD near 1.4215, USD/CHF near 0.8280 and USD/JPY near 157.50, and selling EUR/USD near 1.1255 and GBP/USD near 1.3270. AUD/USD offers a lower-conviction buy near 0.6935 ahead of Australia’s jobs report. USD/CAD carries the highest conviction; AUD/USD the lowest, as it trades against the dollar trend.
Key highlights
- EUR/USD closed at 1.11973 after a 17-month low of 1.11610 and its first weekly closes below the 1.13625 long-term moving average since spring 2025. The bias is to sell recoveries toward 1.1255, targeting 1.1165 and 1.1100.
- US CPI on Wednesday 14 October (16:30 GST, 12:30 GMT) is the key event. Consensus is +0.6% m/m and 3.6% y/y for the headline, +0.2% m/m for core.
- USD/CAD shows the strongest structure: holding at 1.42559 above a broken trendline from the February 2025 high, with weekly RSI at 63.37. Support is 1.4206; resistance 1.4300.
- USD/JPY is capped at 158.51, the weekly high and the ceiling since 24 September. Intervention risk rises toward 159.50–160.00.
- AUD/USD failed again below 0.7000, with a weekly high of 0.69900. A close above 0.7000 is needed to target the 0.7051 moving average.
Market Snapshot: Weekly Close, 9 October 2026
Prices are weekly closes. Change and range are for the week of 5–9 October. The bar under each price marks its position between the outer support and resistance levels for the week ahead.
EUR/USD Euro / US dollar
1.11973
−0.00508−0.45% week
Range 1.11610–1.12767
1.11001.1363
Sell near 1.1255GBP/USD British pound / US dollar
1.32242
−0.00134−0.10% week
Range 1.31843–1.32856
1.31501.3286
Sell near 1.3270USD/JPY US dollar / Japanese yen
158.270
+0.448+0.28% week
Range 157.437–158.511
157.00159.50
Buy near 157.50AUD/USD Australian dollar / US dollar
0.69842
+0.00268+0.39% week
Range 0.69325–0.69900
0.69000.7051
Buy near 0.6935USD/CAD US dollar / Canadian dollar
1.42559
+0.00056+0.04% week
Range 1.42061–1.42992
1.41501.4350
Buy near 1.4215USD/CHF US dollar / Swiss franc
0.82944
+0.00098+0.12% week
Range 0.82773–0.83466
0.82030.8400
Buy near 0.8280- Dollar Index
- 102.06
- Weekly high 102.53
- US 10-year yield
- 5.29%
- Supports USD/JPY, USD/CHF
- Fed funds rate
- 4.00%
- 25 bp priced by December
- EUR/CHF
- 0.9328
- Euro stress gauge
Trade Setups for the Week
Six setups, ranked by conviction. Each carries a defined invalidation level: a daily close beyond the stop negates the idea. Detailed rationale follows in each pair section.
| Pair | Direction | Entry | Stop | Target 1 | Target 2 | Reward:risk | Conviction |
|---|---|---|---|---|---|---|---|
| USD/CAD | Long | 1.4215 | 1.4150 | 1.4300 | 1.4350 | 1.3 / 2.1 | High |
| EUR/USD | Short | 1.1255 | 1.1320 | 1.1165 | 1.1100 | 1.4 / 2.4 | Medium |
| USD/CHF | Long | 0.8280 | 0.8230 | 0.8345 | 0.8400 | 1.3 / 2.4 | Medium |
| GBP/USD | Short | 1.3270 | 1.3330 | 1.3190 | 1.3150 | 1.3 / 2.0 | Medium |
| USD/JPY | Long | 157.50 | 156.90 | 158.50 | 159.40 | 1.7 / 3.2 | Medium |
| AUD/USD | Long | 0.6935 | 0.6885 | 0.6995 | 0.7050 | 1.2 / 2.3 | Low |
Reward:risk is the distance from entry to target 1 and target 2, divided by the distance from entry to the stop. Levels are conditional technical references, not recommendations.
Key Market Drivers
Four themes are expected to set direction across the major currency pairs this week.
US inflation and the Fed’s next hike
The Fed raised rates to 4.00% in September, and most officials expect another hike by year-end; markets price just over 25 bp by December, with little chance of a move on 28 October. With the US 10-year near 5.29% and the Dollar Index at 102.06, a CPI print above consensus would support a retest of the 102.53 weekly high, while a soft core reading could trigger profit-taking after four weekly gains.
Key events: US CPI (Wed), PPI and retail sales (Thu), Fed Chair Warsh (Fri).
French fiscal stress and the euro
EUR/USD is down more than 3% in five weeks on concerns over France’s record debt and a deficit near 5.4% of GDP. The pair hit 1.11610 on Monday before steadying near 1.1200 as French bonds stabilised and German growth projections were upgraded. The ECB deposit rate is 2.65%, and EUR/CHF near 0.9328 signals continued safe-haven demand.
Key events: Lagarde (Wed), eurozone final CPI (Fri), French bond spreads.
Yen intervention risk near 160
USD/JPY has closed four weeks higher in tight ranges, with no trade above 158.51 since 24 September. Japan intervened near 160 earlier this year, the 10-year JGB yield is about 3.02%, and money markets price about a 25% chance of a Bank of Japan hike on 29–30 October. Household spending fell for a ninth month.
Key events: Japan PPI (Tue), BoJ Koeda (Thu), IMF meetings in Bangkok (12–18 Oct).
Jobs data and the Canadian and Australian dollars
Canada lost 68,300 jobs in September against an expected gain of about 7,000, and unemployment rose to 6.5%, sending the Canadian dollar to a 19-month low. The Reserve Bank of Australia, at 4.60%, supports the Aussie, but AUD/USD stalled at 0.69900. Thursday’s Australian employment report and two speeches from BoC Governor Macklem are the next tests for both currencies.
Key events: RBA minutes (Tue), Australia jobs (Thu), BoC Macklem (Wed, Fri).
The dollar is the trade, and Wednesday’s CPI is the trigger. A hot print opens 1.1100 in EUR/USD and 159.50 in USD/JPY; a soft one lifts EUR/USD toward 1.1277 and AUD/USD through 0.7000.
US CPI Scenario Analysis
Consensus for September CPI is +0.6% m/m and 3.6% y/y, with core at about +0.2% m/m and 2.4–2.5% y/y. Select a scenario to view the expected path for each pair, with levels.
Above consensus: headline above +0.6% m/m or core above +0.2%
Yields rise, December hike odds firm, and the Dollar Index retests 102.53.
- EUR/USD1.1161, then 1.1100
- GBP/USD1.3184, then 1.3150
- USD/JPY158.51, then 159.50
- AUD/USD0.6947, then 0.6900
- USD/CAD1.4300, then 1.4350
- USD/CHF0.8347, then 0.8400
Below consensus: core at or below +0.2% m/m
Yields fall and the crowded dollar long unwinds from four weeks of gains.
- EUR/USD1.1277, then 1.1363
- GBP/USD1.3241, then 1.3286
- USD/JPY157.44, then 157.00
- AUD/USD0.7000, then 0.7051
- USD/CAD1.4206, then 1.4150
- USD/CHF0.8277, then 0.8203
USD/JPY: intervention risk
Japanese authorities intervened near 160 earlier this year, and the pair has not traded above 158.51 since 24 September. A hot CPI that lifts USD/JPY toward 159.50 brings it within range of official action, where a sharp reversal toward 157.00 is possible. Positions above 158.51 warrant reduced size.
EUR/USD | Euro / US dollar
EUR/USD Outlook: Fifth Weekly Decline Breaks the 1.1363 Long-Term Average
1.11973 −0.00508 (−0.45%) week Range 1.11610–1.12767
Outlook: Bearish below 1.1320. EUR/USD opened the week at 1.12557, rose to 1.12767, then fell to a 17-month low of 1.11610 before closing at 1.11973. Weekly RSI at 34.11 is approaching oversold, so the preferred approach is to sell a recovery toward 1.1255 rather than the breakdown, with a stop at 1.1320, targeting 1.1165 and 1.1100.
Key levels
- Support 2
- 1.1100
- Support 1
- 1.1161
- Resistance 1
- 1.1277
- Resistance 2
- 1.1363
Weekly chart structure
- EUR/USD is trading within a falling channel that began at the January 2026 high near 1.21. The lower boundary sits near 1.10.
- The fifth consecutive weekly decline took price below the long-term moving average at 1.13625, its first weekly closes beneath that average since spring 2025. The level now acts as resistance.
- The faster moving averages at 1.14841 and 1.15962 are declining overhead, confirming the downtrend.
- Weekly RSI is 34.11, below its 45.65 signal line and close to oversold territory. Short-covering bounces are likely; a trend reversal would require a weekly close back above 1.1363.
Key technical levels
Support is 1.1161, the 17-month low, then 1.1100, the round number above the channel’s lower boundary. A daily close below 1.1161 would open 1.1100 and 1.1080. Resistance is 1.1277, the weekly high, then 1.1363, the long-term moving average. A recovery above 1.1363 would weaken the bearish case.
Fundamental drivers
French fiscal stress
Concerns over France’s record debt, a deficit near 5.4% of GDP and a difficult path to budget cuts have pushed French yields higher, while the US economy and dollar look stronger. The euro stabilised near 1.1200 on Friday as French bonds steadied, and a sharp upgrade of German growth projections offered support.
ECB and data
The ECB deposit rate is 2.65% and the next decision is on 29 October. President Lagarde speaks on Wednesday, the same day as US CPI. German final CPI (Tue), eurozone industrial production (Thu), and eurozone final CPI and trade balance (Fri) complete the calendar.
EUR/USD trade setup
Short Medium conviction- Entry
- 1.1255
- Stop loss
- 1.1320
- Target 1
- 1.1165
- Target 2
- 1.1100
Risk 65 pips. Reward:risk 1.4 to target 1, 2.4 to target 2.
Rationale: The entry sells a recovery to the 1.12557 weekly open, below the 1.12767 weekly high, rather than chasing an oversold breakdown. The stop sits above the weekly high and below the 1.13625 moving average. Target 1 is just above the 1.11610 low; target 2 is 1.1100.
Invalidation: A daily close above 1.1320, which would put the 1.1363 moving average in play and signal a deeper short-covering rally.
GBP/USD | British pound / US dollar
GBP/USD Outlook: Fourth Weekly Loss Leaves Sterling on the 1.3241 Long-Term Average
1.32242 −0.00134 (−0.10%) week Range 1.31843–1.32856
Outlook: Bearish below 1.3286. GBP/USD opened at 1.32313, reached 1.32856, fell to 1.31843 and closed at 1.32242, just below the 1.32408 long-term moving average. The preferred approach is to sell a recovery to 1.3270 with a stop at 1.3330, targeting 1.3190 and 1.3150.
Key levels
- Support 2
- 1.3150
- Support 1
- 1.3184
- Resistance 1
- 1.3241
- Resistance 2
- 1.3286
Weekly chart structure
- GBP/USD is trading within a falling channel from the January 2026 high near 1.387. The channel’s lower boundary sits near 1.30.
- Price closed at 1.32242, just below the long-term moving average at 1.32408. A weekly close below it would confirm a break of the support that has held since early 2025.
- The moving averages at 1.33943 and 1.33966 have converged overhead, forming a heavy resistance cluster.
- Weekly RSI is 41.59, below its 50.46 signal line, confirming bearish momentum without oversold conditions.
Key technical levels
Support is 1.3184, the weekly low near four-month lows, then 1.3150. A daily close below 1.3184 would open 1.3150 and 1.3100. Resistance is 1.3241, the long-term moving average, then 1.3286, the weekly high. Recoveries into 1.3241–1.3286 are the area to sell.
Fundamental drivers
Bank of England and gilts
Bank Rate is 3.75% with inflation at 3.1% in August, above target, and the 10-year gilt yield is close to 5.45%. Markets see hike risk into the 5 November meeting. Sterling gained about 0.3% against the euro on the week but not against the dollar.
Calendar
BoE speakers dominate: Mann and Breeden (Mon), Greene (Tue), Bailey and Pill (Wed), Pill, Breeden and Cleland (Thu) and Bailey again on Friday. Thursday brings UK GDP, trade, industrial and manufacturing production and construction output.
GBP/USD trade setup
Short Medium conviction- Entry
- 1.3270
- Stop loss
- 1.3330
- Target 1
- 1.3190
- Target 2
- 1.3150
Risk 60 pips. Reward:risk 1.3 to target 1, 2.0 to target 2.
Rationale: The entry sells a recovery between the 1.32408 moving average and the 1.32856 weekly high, with the stop above that high. Target 1 sits just above the 1.31843 weekly low; target 2 is 1.3150.
Invalidation: A daily close above 1.3286, the weekly high. Hawkish BoE commentary or strong UK GDP on Thursday are the main risks.
USD/JPY | US dollar / Japanese yen
USD/JPY Outlook: Range Holds Below 158.51 as Intervention Risk Caps Upside
158.270 +0.448 (+0.28%) week Range 157.437–158.511
Outlook: Range-bound with a mild upward bias between 157.00 and 159.50. USD/JPY opened at 157.822, dipped to 157.437, rose to 158.511 and closed at 158.270, its fourth weekly gain. The preferred approach is to buy a pullback to 157.50 with a stop at 156.90, targeting 158.50 and 159.40, with reduced size above 158.51 given intervention risk.
Key levels
- Support 2
- 157.00
- Support 1
- 157.44
- Resistance 1
- 158.51
- Resistance 2
- 159.50
Weekly chart structure
- USD/JPY traded within a rising channel from August 2025 to a July 2026 high near 164, then broke below the channel in August and fell to the 153.494 long-term moving average.
- Four weekly gains since have brought price back to the underside of the broken channel, which now acts as resistance alongside the 159.265 moving average.
- Price is held between the moving averages at 157.885 and 159.265, which explains the unusually narrow weekly ranges.
- Weekly RSI is 50.22, just below its 51.42 signal line: momentum is neutral and gives no clear directional signal.
Key technical levels
Support is 157.44, the weekly low, then 157.00; the 157.885 moving average gives intermediate support. A daily close below 157.00 would expose 156.40. Resistance is 158.51, the weekly high and the ceiling since 24 September, then 159.50, just above the 159.265 moving average. A daily close above 158.51 would open 159.50 and the 160 area where Tokyo intervened earlier this year.
Fundamental drivers
Rate differential
The Fed raised rates to 4.00% in September and markets price just over 25 bp more by December. The US 10-year yield is near 5.29%, against about 3.02% on the 10-year JGB. The Bank of Japan hiked on 18 September, and money markets price roughly a 25% chance of another move on 29–30 October.
Yen backdrop
Japan’s household spending fell for a ninth straight month, which undermines the yen, while Finance Minister Katayama has backed the BoJ and pushed back on yen weakness. Tokyo is closed on Monday for Sports Day, and the IMF and World Bank meetings in Bangkok (12–18 October) are a likely stage for currency comments.
USD/JPY trade setup
Long Medium conviction- Entry
- 157.50
- Stop loss
- 156.90
- Target 1
- 158.50
- Target 2
- 159.40
Risk 60 pips. Reward:risk 1.7 to target 1, 3.2 to target 2.
Rationale: Entry at 157.50 buys a retest of the 157.437 weekly low, with the stop below 157.00. Target 1 is the 158.51 ceiling; target 2 sits just below 159.50, short of the intervention zone near 160.
Invalidation: A daily close below 157.00. Official intervention, or a hawkish signal from BoJ’s Koeda on Thursday, would also negate the setup.
AUD/USD | Australian dollar / US dollar
AUD/USD Outlook: Losing Streak Ends, but 0.7000 Caps the Recovery
0.69842 +0.00268 (+0.39%) week Range 0.69325–0.69900
Outlook: Cautiously constructive above 0.6900, but capped at 0.7000. AUD/USD opened at 0.69479, dipped to 0.69325, rose to 0.69900 and closed at 0.69842, ending a four-week losing streak. The preferred approach is a smaller buy near 0.6935 with a stop at 0.6885, targeting 0.6995 and 0.7050, as the trade runs against the dollar trend.
Key levels
- Support 2
- 0.6900
- Support 1
- 0.6947
- Resistance 1
- 0.7000
- Resistance 2
- 0.7051
Weekly chart structure
- AUD/USD rose within a rising channel from October 2025, peaking near 0.727 in the spring and near 0.723 in September 2026, before slipping below the channel’s lower boundary in late September.
- Last week’s candle held the moving average at 0.69468, with a low of 0.69325, but the recovery stalled at 0.69900, short of 0.7000.
- The faster moving average at 0.70512 now caps the pair above 0.7000; the long-term average at 0.66792 is the deeper support.
- Weekly RSI is 46.30, below its 54.47 signal line, indicating that momentum has not yet recovered.
Key technical levels
Support is 0.6947, the moving average, then 0.6900; a daily close below 0.6900 would expose 0.6850. Resistance is 0.7000, which has turned the pair back twice, then 0.7051, the moving average. A daily close above 0.7000 would open 0.7051.
Fundamental drivers
Reserve Bank of Australia
The RBA lifted the cash rate to 4.60% on 29 September, the highest since 2011, and hawkish expectations keep the Aussie supported against a strong dollar. Tuesday’s minutes will show how open the board is to a further increase.
Data and China
NAB business confidence (Tue), the Westpac leading index (Wed) and the September employment report on Thursday are the local catalysts. China CPI and PPI on Wednesday (August: CPI +0.8% y/y, PPI +3.8% y/y) matter for sentiment, with China’s Q3 GDP due on 19 October.
AUD/USD trade setup
Long Low conviction- Entry
- 0.6935
- Stop loss
- 0.6885
- Target 1
- 0.6995
- Target 2
- 0.7050
Risk 50 pips. Reward:risk 1.2 to target 1, 2.3 to target 2.
Rationale: Entry at 0.6935 sits between the 0.69325 weekly low and the 0.69468 moving average, with the stop below 0.6900. Target 1 is just under 0.7000; target 2 is the 0.7051 moving average, which requires strong Australian jobs and a soft US CPI.
Invalidation: A daily close below 0.6900. Conviction is low because the trade runs against the broad dollar trend.
USD/CAD | US dollar / Canadian dollar
USD/CAD Outlook: Trendline Breakout Holds Above 1.4206 After Canada’s Jobs Shock
1.42559 +0.00056 (+0.04%) week Range 1.42061–1.42992
Outlook: Bullish above 1.4150. USD/CAD opened at 1.42548, rose to 1.42992, dipped to 1.42061 and closed at 1.42559, consolidating its breakout near a 19-month high. The preferred approach is to buy a pullback to 1.4215 with a stop at 1.4150, targeting 1.4300 and 1.4350.
Key levels
- Support 2
- 1.4150
- Support 1
- 1.4206
- Resistance 1
- 1.4300
- Resistance 2
- 1.4350
Weekly chart structure
- USD/CAD broke above the descending trendline from the February 2025 high near 1.48 two weeks ago, and last week held above it, confirming the breakout.
- The rising trendline from the 2026 low near 1.355 remains intact, defining a broader uptrend.
- Price holds above all three moving averages, at 1.40194, 1.39478 and 1.38802, which have turned higher.
- Weekly RSI is 63.37, above its 54.24 signal line: momentum is strong without reaching overbought conditions.
Key technical levels
Support is 1.4206, the weekly low, then 1.4150, near the broken trendline. A daily close below 1.4150 would suggest the jobs-driven move is fading and expose the 1.40194 moving average. Resistance is 1.4300, the 1.42992 weekly high, then 1.4350. A daily close above 1.4300 would open 1.4350.
Fundamental drivers
Canadian labour market
Canada lost 68,300 jobs in September against an expected gain of about 7,000, and unemployment rose to 6.5%. That cut pricing for a Bank of Canada hike, which markets had put near 60% for October before the report. Governor Macklem speaks on Wednesday and Friday.
Terms of trade
Energy is Canada’s largest export, so softer crude prices would remove a source of support for the Canadian dollar. US CPI and Fed expectations drive the US side of the pair.
USD/CAD trade setup
Long High conviction- Entry
- 1.4215
- Stop loss
- 1.4150
- Target 1
- 1.4300
- Target 2
- 1.4350
Risk 65 pips. Reward:risk 1.3 to target 1, 2.1 to target 2.
Rationale: The setup aligns with the trendline breakout, positive momentum and a clear fundamental driver. Entry at 1.4215 retests the 1.42061 weekly low, with the stop at 1.4150 near the broken trendline.
Invalidation: A daily close below 1.4150, which would return price toward the broken trendline. A hawkish Macklem or firmer Canadian data are the main risks.
USD/CHF | US dollar / Swiss franc
USD/CHF Outlook: Breakout Above 0.8203 Holds as Rate Gap Favours the Dollar
0.82944 +0.00098 (+0.12%) week Range 0.82773–0.83466
Outlook: Bullish above 0.8230. USD/CHF opened at 0.82846, rose to 0.83466, its highest since May 2025, then eased to close at 0.82944. The preferred approach is to buy a pullback to 0.8280 with a stop at 0.8230, targeting 0.8345 and 0.8400.
Key levels
- Support 2
- 0.8203
- Support 1
- 0.8277
- Resistance 1
- 0.8347
- Resistance 2
- 0.8400
Weekly chart structure
- USD/CHF has broken above the descending trendline band from the April 2025 high near 0.845 and above the long-term moving average at 0.82034, for the first time since early 2025.
- The rising trendline from the January 2026 low near 0.765 underpins the advance.
- Last week’s upper wick to 0.83466 shows selling above 0.8340; the close at 0.82944 held above the 0.82773 weekly low.
- Weekly RSI is 65.20, above its 59.23 signal line: momentum is strong and nearing, but not yet in, overbought territory.
Key technical levels
Support is 0.8277, the weekly low, then 0.8203, the long-term moving average and the top of the broken trendline band. A daily close below 0.8203 would suggest the dollar rally is losing momentum. Resistance is 0.8347, the weekly high, then 0.8400. A daily close above 0.8350 would resume the uptrend toward 0.8400.
Fundamental drivers
Policy gap
The SNB held its policy rate at 0% on 24 September and Swiss inflation was 1.0% in September, so the franc has little rate support. The Fed’s hike to 4.00% widened the yield gap to roughly 3.9 percentage points, the main driver of USD/CHF in 2026.
Safe-haven flows
There is no major Swiss data this week, so USD/CHF will follow the dollar and risk sentiment. Safe-haven demand for the franc rises on geopolitical or French bond stress, which also explains EUR/CHF near 0.9328.
USD/CHF trade setup
Long Medium conviction- Entry
- 0.8280
- Stop loss
- 0.8230
- Target 1
- 0.8345
- Target 2
- 0.8400
Risk 50 pips. Reward:risk 1.3 to target 1, 2.4 to target 2.
Rationale: Entry at 0.8280 retests the 0.82773 weekly low, with the stop above the 0.8203 moving average and trendline band. Target 1 is just below the 0.83466 weekly high; target 2 is 0.8400.
Invalidation: A daily close below 0.8230, which would put the 0.8203 breakout level under test. Safe-haven demand on geopolitical or French bond headlines is the main risk.
Economic Calendar: 12–16 October 2026
Events with the potential to move the pairs in this report. Times are Gulf Standard Time (GST) with GMT shown beneath; where an exact time is not confirmed, the session is shown. Context gives the level each event puts in play.
| Date | Event | Market | Impact | Context |
|---|---|---|---|---|
| All day | US Columbus Day (bond market closed) and Japan Sports Day (Tokyo closed) | USD/JPY, all USD pairs | Medium | Thin liquidity can exaggerate moves. USD/JPY opens within its 157.44–158.51 range. |
| Europe session | BoE Mann and Breeden speak | GBP/USD | Medium | Rate-hike signals before 5 November. A hawkish tone helps sterling hold 1.3184. |
| 04:30 GST 00:30 GMT | RBA minutes and NAB business confidence | AUD/USD | Medium | Tone on further tightening after the 4.60% rate. A hawkish lean supports a test of 0.7000. |
| Europe / US session | BoE Greene and Fed Governor Waller speak | GBP/USD, all USD pairs | Medium | Waller has said more hikes are needed, though not necessarily back to back. Firm dollar tone keeps EUR/USD below 1.1277. |
| 05:30 GST 01:30 GMT | China CPI and PPI (Sep) | AUD/USD | Medium | August: CPI +0.8% y/y, PPI +3.8% y/y. Firm data supports AUD/USD above 0.6947. |
| 16:30 GST 12:30 GMT | US CPI (Sep) | All pairs | High | Consensus +0.6% m/m, 3.6% y/y; core +0.2% m/m. Above consensus: EUR/USD toward 1.1161, USD/JPY toward 158.51–159.50. Below: EUR/USD toward 1.1277, AUD/USD toward 0.7000. |
| Europe / US session | ECB Lagarde, BoE Bailey and Pill, BoC Macklem, Fed Bowman and Barkin speak | EUR/USD, GBP/USD, USD/CAD | Medium | Same day as US CPI. A dovish Macklem supports USD/CAD toward 1.4300. |
| 04:30 GST 00:30 GMT | Australia employment report (Sep); RBNZ Governor Breman speaks | AUD/USD | High | Strong jobs and a soft US CPI are the route above 0.7000; weak data risks 0.6900. |
| Asia session | BoJ Koeda speaks | USD/JPY | Medium | Hints on the 29–30 October meeting (about 25% priced). A hawkish tone pressures USD/JPY toward 157.44. |
| Europe session | UK GDP and trade data; BoE Pill, Breeden and Cleland speak | GBP/USD | High | Weak GDP raises the odds of a break below 1.3184; a firm print supports a recovery to 1.3241. |
| 16:30 GST 12:30 GMT | US PPI and retail sales | All USD pairs | High | Consumer strength versus inflation pressure; confirms or offsets the CPI signal around Dollar Index 102.06. |
| Europe / US session | Fed Chair Warsh, BoC Macklem and BoE Bailey speak | All USD pairs, USD/CAD, GBP/USD | High | Closing risk event of the week. Sets direction into the weekly close relative to 1.1161 in EUR/USD and 1.4300 in USD/CAD. |
Conclusion
The dollar is the dominant trade and Wednesday’s CPI is the trigger. The Dollar Index has risen four weeks in a row to a high of 102.53, supported by a Fed at 4.00% that still expects another hike, a widening rate gap with the SNB and BoC, and a euro weighed down by French fiscal stress. A CPI print above consensus would lock in December hike expectations: EUR/USD toward 1.1161 and 1.1100, GBP/USD below 1.3184, AUD/USD toward 0.6900, USD/JPY toward 158.51–159.50, and USD/CAD and USD/CHF through 1.4300 and 0.8347. A soft core reading would unwind a crowded dollar long, lifting EUR/USD toward 1.1277 from oversold levels and AUD/USD toward 0.7000.
By pair, EUR/USD offers the clearest sell-the-recovery setup while 1.1320 caps, and GBP/USD is testing its long-term average at 1.3241 with Thursday’s UK GDP as the main risk. USD/CAD has the strongest structure after its trendline breakout, while USD/CHF benefits from a policy gap of about 3.9 percentage points. USD/JPY is pinned between 157.44 and 158.51 with intervention risk near 160, and AUD/USD needs a daily close above 0.7000 to resume its recovery.
Our approach is to trade the market’s reaction to the data rather than position ahead of it, to respect the invalidation levels defined in this report, to size positions modestly around CPI, and to treat every level as conditional on price confirmation.
| Pair | Bias | Key level | Targets | Invalidation | Principal risk |
|---|---|---|---|---|---|
| EUR/USD | Sell near 1.1255 | 1.1161 | 1.1165 / 1.1100 | Above 1.1320 | CPI below consensus |
| GBP/USD | Sell near 1.3270 | 1.3241 | 1.3190 / 1.3150 | Above 1.3286 | Strong UK GDP |
| USD/JPY | Buy near 157.50 | 158.51 | 158.50 / 159.40 | Below 157.00 | Intervention near 160 |
| AUD/USD | Buy near 0.6935 | 0.7000 | 0.6995 / 0.7050 | Below 0.6900 | CPI above consensus |
| USD/CAD | Buy near 1.4215 | 1.4206 | 1.4300 / 1.4350 | Below 1.4150 | Hawkish BoC tone |
| USD/CHF | Buy near 0.8280 | 0.8277 | 0.8345 / 0.8400 | Below 0.8230 | Safe-haven flows |
Trade EUR/USD, GBP/USD, USD/JPY and the other majors with Capital Street FX.
Frequently Asked Questions
What is driving the US dollar in the week of 12–16 October 2026?
US September CPI on Wednesday 14 October is the main driver, followed by US PPI and retail sales on Thursday and Fed Chair Warsh on Friday. The Dollar Index rose for a fourth week, reaching 102.53 on Monday, its highest since April 2025, on a Fed that raised rates to 4.00% in September and still expects another hike by year-end.
What is the outlook for EUR/USD for 12–16 October 2026?
EUR/USD closed at 1.11973 after a fifth weekly decline and a 17-month low of 1.11610. The bias is to sell recoveries toward 1.1255 while below 1.1320. Resistance is 1.1277, the weekly high, then 1.1363, the long-term moving average. A break below 1.1161 targets 1.1100. French fiscal stress and US CPI are the key risks.
Will USD/JPY break 160?
USD/JPY closed at 158.270 and has not traded above 158.51 since 24 September. Japanese authorities intervened near 160 earlier this year, and money markets price about a 25% chance of a Bank of Japan hike on 29–30 October. A US CPI print above consensus could lift the pair toward 159.50, where intervention risk rises sharply.
Why is USD/CAD near its highest level in 19 months?
Canada lost 68,300 jobs in September against an expected gain of about 7,000, and unemployment rose to 6.5%, cutting Bank of Canada hike expectations. USD/CAD closed at 1.42559 after a weekly high of 1.42992, holding above a broken trendline from the February 2025 high. Support is 1.4206, then 1.4150; resistance is 1.4300, then 1.4350.
When is US CPI released on 14 October 2026?
US September CPI is released on Wednesday 14 October 2026 at 12:30 GMT, which is 16:30 Gulf Standard Time and 08:30 US Eastern Time. Consensus is +0.6% m/m and 3.6% y/y for the headline, and about +0.2% m/m and 2.4–2.5% y/y for core.
When are the next central bank rate decisions?
The Federal Reserve decides on 28 October, the European Central Bank on 29 October, the Bank of Japan on 29–30 October and the Bank of England on 5 November. The week of 12–16 October has no major rate decisions, only central bank speeches.
