Fed Hike Bets and Gulf Oil Risk Keep EUR/USD Close to Its 1.1150 Floor | Technical Analysis – Forex Report | 13-10-2026
Forex Today | Tuesday 13 October 2026
Fed Hike Bets and Gulf Oil Risk Keep EUR/USD Close to Its 1.1150 Floor
Market Overview
The dollar held near a 17-month high on Tuesday 13 October, with the US Dollar Index at about 102.35 as Treasury yields eased. CME FedWatch prices about an 85% chance of a Federal Reserve (Fed) hike in December after Cleveland Fed President Beth Hammack argued for higher rates. Oil adds a second layer of risk. Brent slipped to about $105.6 as Russia agreed to supply diesel, but weekend Houthi strikes on Saudi Arabia keep a premium in the price. In Europe, French budget strain leaves the euro close to its weakest level since May 2025, so the desk prefers the dollar against the Swiss franc and the Canadian dollar rather than adding euro shorts at the lows.
Key highlights
- Oil supply: about 605,000 barrels a day of US Gulf of Mexico output, nearly 30% of the region, remains shut in after a hurricane.
- Oil demand: OPEC cut its 2026 demand growth estimate to 400,000 barrels a day, from 1.4 million at the start of the year.
- Australia: Reserve Bank of Australia (RBA) minutes kept a hike above 4.6% on the table, which limits losses in the Australian dollar.
- China: September consumer prices are expected at 1.0% y/y at 01:30 GMT on Wednesday, with trade figures at 03:00 GMT.
- Central bank speakers: ECB policymakers Elderson, Escrivá and Lane and the Bank of England’s Megan Greene speak today.
- Sterling: GBP/USD steadied near 1.3225, and UK monthly GDP on Thursday is the next domestic test for the pound.
What’s Moving Forex Today
Fed December Hike Odds Hold Near 85% After Hammack Remarks
CME FedWatch puts the chance of a December hike at 84.7% and an October hold at 80.6%, following Monday’s call by Cleveland’s Hammack for tighter policy to contain inflation.
Source: FXStreet and Vantage Markets, 13 Oct 2026
Brent Eases From a Four-Week High as Russian Diesel Offsets Gulf Risk
Brent settled just under $107 on Monday, its highest close since mid-September, then slipped about 1% after Russia agreed to supply diesel. Houthi strikes on Saudi Arabia and tanker attacks near Hormuz keep supply risk alive.
Source: Tradingpedia and HDFC Sky (Oilprice.com data), 13 Oct 2026
French Budget Strain Keeps the Euro Near a 17-Month Low
The French–German 10-year spread sits near 137bp against a longer-run mean of about 110bp, and euro short positions are the largest since December 2024, according to Société Générale.
Source: Vantage Markets, 13 Oct 2026
Key Drivers Today
Five readings and events that set direction for the major currency pairs. All times are GMT.
- CME FedWatch, December hike
- 84.7%
- Hammack backs higher rates
- Brent crude
- ~$105.6
- Diesel relief against Gulf strikes
- China inflation and trade (Sep)
- 1.0% y/y exp.
- Prior 0.8%; trade 03:00 GMT
- US CPI (Sep)
- +0.6% m/m exp.
- Core +0.2% m/m exp.
- Australia jobs (Sep)
- +20K exp.
- Prior +39.5K
Swipe the strip to see every driver.
Trade Setups for Today
Ranked by conviction and valid for today’s session. A 1-hour close beyond the stop cancels the idea.
| Pair | Direction | Entry | Stop | Target 1 | Target 2 | Reward:risk | Conviction |
|---|---|---|---|---|---|---|---|
| USD/CHF | Long | 0.8290 | 0.8245 | 0.8365 | 0.8400 | 1.7 / 2.4 | Medium |
| USD/CAD | Long | 1.4210 | 1.4155 | 1.4300 | 1.4380 | 1.6 / 3.1 | Medium |
| AUD/USD | Short | 0.6990 | 0.7035 | 0.6905 | 0.6840 | 1.9 / 3.3 | Medium |
| GBP/CHF | Long | 1.1005 | 1.0965 | 1.1060 | 1.1100 | 1.4 / 2.4 | Low |
| EUR/USD | Short | 1.1215 | 1.1265 | 1.1150 | 1.1100 | 1.3 / 2.3 | Low |
| USD/JPY | Short | 158.80 | 159.60 | 157.70 | 156.70 | 1.4 / 2.6 | Low |
Reward:risk is the distance from entry to each target divided by the distance from entry to the stop. Levels are conditional technical references, not recommendations.
Brent Crude Scenario Analysis
Oil is today’s swing factor for currencies: Canada exports crude, while the eurozone and Japan import it. The three pairs below react most to the next move in Brent.
Risk premium returns: Brent back above $107
Fresh Gulf supply threats would support the Canadian dollar and weigh on the euro and the yen.
- USD/CAD1.4200, then 1.4160
- EUR/USD1.1150, then 1.1100
- USD/JPY158.50, then 159.48
Supply relief: Brent below $104
Russian diesel flows and a firmer Ukraine energy truce would ease pressure on importers and remove support from the Canadian dollar.
- USD/CAD1.4300, then 1.4380
- EUR/USD1.1215, then 1.1320
- USD/JPY157.70, then 156.70
USD/CHF | US dollar / Swiss franc
USD/CHF Analysis: Rising Channel Support at 0.8290 Holds as a 0% SNB Keeps the Franc Heavy
0.83273 −0.00189 (−0.23%) day Day range 0.83256–0.83462
Outlook: Bias is bullish while USD/CHF holds the 0.8290 channel floor. The pair slipped 0.23% to 0.83273 on softer Treasury yields, but the gap between a Swiss National Bank (SNB) at zero and a Fed priced to tighten keeps the franc heavy.
Key levels
- Support 2
- 0.8245
- Support 1
- 0.8290
- Resistance 1
- 0.8365
- Resistance 2
- 0.8400
- The channel has guided price higher since the mid-August low near 0.7950; its lower line and the 0.82895 fast average converge at 0.8290, with the 0.81705 and 0.81046 averages rising beneath.
- RSI at 61.00 sits under its 65.94 signal but above 50; the early-October high near 0.8380 caps the upside.
Setup: Long at 0.8290, stop 0.8245, targets 0.8365 and 0.8400. Reward:risk 1.7 / 2.4, medium conviction.
USD/CAD | US dollar / Canadian dollar
USD/CAD Analysis: Breakout Stalls Below 1.4300 as Crude and Rate Spreads Pull Both Ways
1.42657 −0.00167 (−0.12%) day Day range 1.42610–1.42836
Outlook: Bias is bullish while USD/CAD holds above the 1.4160 fast average. The pair slipped 0.12% to 1.42657, just under last week’s 1.4300 peak, the highest since April 2025, as softer crude offset firm US rate expectations.
Key levels
- Support 2
- 1.4160
- Support 1
- 1.4200
- Resistance 1
- 1.4300
- Resistance 2
- 1.4380
- Price broke above a falling channel in early September and has risen about 500 pips from the 1.3760 August low; 1.4250–1.4300 caps the range.
- The 1.41637, 1.40259 and 1.39894 averages rise in a bullish stack, while RSI at 67.96 sits under its 72.74 signal, near overbought, so a pullback toward 1.4200 may come first.
Setup: Long at 1.4210, stop 1.4155, targets 1.4300 and 1.4380. Reward:risk 1.6 / 3.1, medium conviction.
AUD/USD | Australian dollar / US dollar
AUD/USD Analysis: Rejection at 0.7000 Keeps the Aussie Below All Three Averages Despite a Hawkish RBA
0.69640 +0.00050 (+0.07%) day Day range 0.69498–0.69675
Outlook: Bias is bearish below the 0.7000 round number and the 0.70127 fast average. AUD/USD held 0.69640 after Monday’s rejection at 0.7000, with China’s overnight data the next test for the Australian dollar.
Key levels
- Support 2
- 0.6840
- Support 1
- 0.6905
- Resistance 1
- 0.7000
- Resistance 2
- 0.7045
- Price broke below a rising channel in mid-September, and the fast, 0.70455 mid and 0.70864 long averages sit above it in a bearish stack.
- RSI at 38.06 is above its 34.13 signal but under 50; the early-October low near 0.6905 has held so far, with September jobs data due on Thursday.
Setup: Short at 0.6990, stop 0.7035, targets 0.6905 and 0.6840. Reward:risk 1.9 / 3.3, medium conviction.
GBP/CHF | British pound / Swiss franc
GBP/CHF Analysis: Sterling Tests the Channel Floor at 1.1000 Against a Soft Franc
1.10166 −0.00088 (−0.08%) day Day range 1.10098–1.10287
Outlook: Bias is neutral to bullish while GBP/CHF holds the 1.1000 channel floor. The cross eased 0.08% to 1.10166 and held the floor, while low Swiss rates keep the franc on the back foot.
Key levels
- Support 2
- 1.0975
- Support 1
- 1.1000
- Resistance 1
- 1.1060
- Resistance 2
- 1.1100
- An uptrend channel from the late-May low near 1.0490 has guided the cross, and a close below 1.0975 would break the structure.
- The 1.10003 fast and 1.09743 mid averages sit just below price, and RSI at 53.35 is flat against its signal, leaving the channel floor in charge.
Setup: Long at 1.1005, stop 1.0965, targets 1.1060 and 1.1100. Reward:risk 1.4 / 2.4, low conviction.
EUR/USD | Euro / US dollar
EUR/USD Analysis: Oversold Rebound From 1.1150 Meets Falling Channel Resistance Below 1.1215
1.11825 +0.00277 (+0.25%) day Day range 1.11516–1.11834
Outlook: Bias is bearish below 1.1215, but momentum is stretched. EUR/USD rose 0.25% to 1.11825 from a 17-month low at 1.11516, yet fading European Central Bank (ECB) hike bets and the wide French spread cap rebounds.
Key levels
- Support 2
- 1.1100
- Support 1
- 1.1150
- Resistance 1
- 1.1215
- Resistance 2
- 1.1320
- A falling channel from the mid-June high near 1.1830 still contains price, which bounced from its lower line; the 1.13219, 1.14822 and 1.14877 averages all slope down above price.
- RSI at 27.04 is above its 22.67 signal but deeply oversold, which raises the risk of short covering toward 1.1320.
Setup: Short at 1.1215, stop 1.1265, targets 1.1150 and 1.1100. Reward:risk 1.3 / 2.3, low conviction.
USD/JPY | US dollar / Japanese yen
USD/JPY Analysis: Triangle Apex Meets the 158.50 Average as Intervention Risk Caps Rallies Below 160
158.148 −0.419 (−0.26%) day Day range 158.114–158.640
Outlook: Bias is neutral to bearish below 158.50, with 160 the intervention zone. USD/JPY eased 0.26% to 158.148 as Treasury yields slipped, while a firmer oil price would add pressure on the yen through Japan’s energy import bill.
Key levels
- Support 2
- 156.70
- Support 1
- 157.70
- Resistance 1
- 158.50
- Resistance 2
- 159.48
- Price sits at the apex of a triangle between the late-July high near 164.80 and the early-September low near 152.80; the 157.710 and 157.647 averages hold beneath and the 159.478 average above.
- RSI at 53.93 sits close to its 53.58 signal, so price needs a daily close beyond 158.50 or 157.70 to set the next direction.
Setup: Short at 158.80, stop 159.60, targets 157.70 and 156.70. Reward:risk 1.4 / 2.6, low conviction.
Conclusion
Fed hike pricing keeps the dollar near its highs, and oil decides which currencies take the strain: the Canadian dollar gains when Brent firms, while the euro and the yen lose. The desk favours dollar longs against the franc and the Canadian dollar on pullbacks and keeps euro and yen ideas small. China’s figures overnight can move the Australian dollar, and Wednesday’s US CPI at 12:30 GMT is the larger gap risk, so reduce size before it.
Trade EUR/USD, USD/JPY, USD/CAD and other major currency pairs with Capital Street FX.
Frequently Asked Questions
Why is the US dollar strong this month?
Markets expect the Fed to raise rates again in December after Beth Hammack of the Cleveland Fed backed tighter policy, while political strain in France and Gulf supply risk add demand for the dollar. Softer Treasury yields explain Tuesday’s modest pullback.
How do oil prices affect USD/CAD and USD/JPY?
Canada exports crude, so a higher Brent price tends to support the Canadian dollar and push USD/CAD lower. Japan imports almost all its oil, so the same move widens its import bill and tends to lift USD/JPY.
Why is EUR/USD near a 17-month low?
Investors demand a wider premium on French debt over German bonds as Paris struggles to pass its budget, while the ECB looks unlikely to tighten further. Rising US rate expectations add to the pressure on the pair.
What is moving the Australian dollar today?
AUD/USD trades below 0.7000 after Monday’s rejection there. Hawkish RBA minutes offer support, but China’s September inflation and trade figures overnight and Thursday’s jobs report decide whether the pair holds its early-October low.
