Soft Dollar Lifts Pound and Kiwi While French Unrest Caps the Euro at 1.1270 | Technical Analysis – Forex Report | 19-10-2026
Forex Today | Monday 19 October 2026
Soft Dollar Lifts Pound and Kiwi While French Unrest Caps the Euro at 1.1270
Market Overview
Violent cost-of-living protests in France weighed on the euro at the start of the week, with EUR/USD falling 0.13% to 1.12242 after President Emmanuel Macron condemned the unrest in a televised address on Sunday (Reuters). The dollar index held at 101.83, close to its monthly low, as Federal Reserve (Fed) officials entered their pre-meeting blackout and the odds of an October hike eased to about 17%. In Asia, Bank of Japan (BoJ) Governor Kazuo Ueda said underlying inflation is close to the 2% target, keeping USD/JPY near 158.072. The next catalyst is Canadian consumer prices at 12:30 GMT, expected at 3.2% against 3.0% in August. We read the session as soft for the dollar but driven by headlines.
Key highlights
- US inflation: September consumer prices rose 0.6% on the month to 3.7% annually, while producer prices reached 6.3%, the highest since 2022.
- ECB: Governing Council member Nagel said on Friday that the European Central Bank may need further rate rises to contain inflation.
- Oil: WTI eased towards $97.50 after Washington waived sanctions on Russian oil, according to FXStreet.
- Gulf risk: Iran’s Revolutionary Guard said a tanker hit a mine in the Strait of Hormuz and caught fire; the report is unconfirmed.
- Japan and the US: the two countries reportedly plan large-scale military drills from 19 to 29 October.
- China: the People’s Bank of China set the USD/CNY fixing at 6.7208, against 6.7220 on Friday.
What’s Moving Forex Today
French unrest hits the euro as Macron condemns violence
France suffered one of its worst days of unrest in years on Saturday over living costs. The euro fell 0.1% to 1.1225 as Asian trading began, which steadied the dollar index.
Ueda says underlying inflation is close to the BoJ target
The governor described underlying inflation as quite close to 2%, and the dollar was flat at 158.00 yen. Reports of intervention risk add a cap to rallies in USD/JPY.
Warsh gives no signal and Fed hike odds ease
Fed Chair Kevin Warsh offered no guidance on October at Friday’s IMF meetings. Hike odds for the 27–28 October meeting slipped to about 17% from 22% before the hot CPI release.
Key Drivers Today
Five readings and events that set direction for forex. All times are GMT.
- Dollar index
- 101.83
- Near monthly low
- WTI crude
- ~$97.50
- Russia sanctions waived
- Canada CPI
- 3.2% y/y
- September, annual rate
- BoC business survey
- Q3
- Follows inflation data
- UK unemployment
- 4.9%
- Consensus unchanged
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/CAD | Short | 1.4185 | 1.4225 | 1.4040 | 1.3900 | 3.6 / 7.1 | Medium |
| EUR/USD | Short | 1.1260 | 1.1295 | 1.1180 | 1.1105 | 2.3 / 4.4 | Medium |
| GBP/USD | Long | 1.3255 | 1.3215 | 1.3388 | 1.3500 | 3.3 / 6.1 | Medium |
| NZD/USD | Long | 0.5640 | 0.5610 | 0.5700 | 0.5771 | 2.0 / 4.4 | Medium |
| USD/CHF | Long | 0.8215 | 0.8170 | 0.8298 | 0.8395 | 1.8 / 4.0 | Medium |
| USD/JPY | Short | 158.90 | 159.50 | 157.70 | 156.50 | 2.0 / 4.0 | 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.
Canada CPI Scenario Analysis
Canadian consumer prices land at 12:30 GMT, the main scheduled release of the session. The print shapes Bank of Canada expectations and the direction of USD/CAD.
Hot CPI: above consensus
Broader price pressure would keep Bank of Canada tightening in play and lift the Canadian dollar, especially with oil elevated.
- USD/CAD1.4040, then 1.4004
- Bank of Canada pricingMore tightening priced
Soft CPI: at or below 3.0%
A cooler print would suggest energy-led inflation is not spreading, easing pressure on the Bank of Canada and the currency.
- USD/CAD1.4195, then 1.4300
- Bank of Canada pricingTightening bets fade
USD/JPY | US dollar vs Japanese yen
USD/JPY Analysis: Triangle Squeeze Tightens Around 158.00
158.072 +0.096 (+0.06%) day Day range 157.697–158.092
Outlook: Bias is mildly lower while 159.00 caps rallies. Hawkish remarks from the Bank of Japan and intervention risk weigh on the pair, while softer Fed hike pricing limits the dollar’s room to recover today.
Key levels
- Support 2
- 156.50
- Support 1
- 157.70
- Resistance 1
- 159.00
- Resistance 2
- 160.00
- Price sits on the lower edge of the triangle, with the upper edge near 159.00 and the September low at 153.00 well below.
- Price is above the 157.953 and 157.696 averages but under 159.426; RSI 53.02 is level with its signal line at 53.88, a neutral reading.
Setup: Short at 158.90, stop 159.50, targets 157.70 and 156.50. Reward:risk 2.0 / 4.0, low conviction.
NZD/USD | New Zealand dollar vs US dollar
NZD/USD Analysis: Channel Breakout Needs 0.5700 to Confirm
0.56550 +0.00017 (+0.03%) day Day range 0.56497–0.56624
Outlook: Bias is a cautious rebound after price left its falling channel. A hold above 0.5633 keeps buyers in control, helped by a softer dollar and Chinese activity data released at 02:00 GMT.
Key levels
- Support 2
- 0.5575
- Support 1
- 0.5633
- Resistance 1
- 0.5700
- Resistance 2
- 0.5771
- The swing low near 0.5575 marks the base of the October decline, and the channel’s upper edge now acts as a retest zone.
- Price is above the 0.56326 average but below the 0.57707 and 0.57788 averages; RSI 46.80 is recovering from oversold readings, its signal line at 31.87.
Setup: Long at 0.5640, stop 0.5610, targets 0.5700 and 0.5771. Reward:risk 2.0 / 4.4, medium conviction.
EUR/USD | Euro vs US dollar
EUR/USD Analysis: Falling Channel Keeps Rallies Below 1.1270
1.12242 −0.00147 (−0.13%) day Day range 1.11805–1.12342
Outlook: Bias remains lower while 1.1270 holds. French political risk weighs on the euro, but a soft dollar and hawkish European Central Bank (ECB) comments stop a sharper slide.
Key levels
- Support 2
- 1.1105
- Support 1
- 1.1180
- Resistance 1
- 1.1270
- Resistance 2
- 1.1400
- The channel’s upper edge and the faster average converge near 1.1270, while the October low near 1.1105 anchors the downside.
- RSI 38.54 has recovered from oversold readings but stays below 50; the slower averages at 1.14651 and 1.14613 slope lower.
Setup: Short at 1.1260, stop 1.1295, targets 1.1180 and 1.1105. Reward:risk 2.3 / 4.4, medium conviction.
GBP/USD | British pound vs US dollar
GBP/USD Analysis: Channel Break Points to 1.3388 if 1.3248 Holds
1.33241 +0.00025 (+0.02%) day Day range 1.33031–1.33386
Outlook: Bias is higher after the pair pushed through its falling channel. The 1.3248 average is the level that keeps buyers in control, with softer US dollar sentiment the main support today.
Key levels
- Support 2
- 1.3140
- Support 1
- 1.3248
- Resistance 1
- 1.3388
- Resistance 2
- 1.3500
- Last week’s push printed a high near 1.3380 before price eased back to retest the break; the swing low near 1.3140 is the floor.
- Price is above the 1.32478 average but under the 1.33880 and 1.34125 averages; RSI 52.22 is back above 50, its signal line at 39.86.
Setup: Long at 1.3255, stop 1.3215, targets 1.3388 and 1.3500. Reward:risk 3.3 / 6.1, medium conviction.
USD/CAD | US dollar vs Canadian dollar
USD/CAD Analysis: Loss of 1.4195 Opens Room Towards 1.4040
1.41220 −0.00168 (−0.12%) day Day range 1.41149–1.41342
Outlook: Bias is lower while 1.4195 caps rebounds. Canadian inflation at 12:30 GMT and oil above $100 favour the Canadian dollar, while softer Fed hike pricing adds to the dollar’s weakness.
Key levels
- Support 2
- 1.3900
- Support 1
- 1.4040
- Resistance 1
- 1.4195
- Resistance 2
- 1.4300
- The reversal began at the channel top near 1.4300; the channel floor near 1.3860 sits far below, so slower averages are the nearer test.
- Price remains above the 1.40396 and 1.40039 averages; RSI 48.49 has slipped under 50 and well below its signal line at 66.69.
Setup: Short at 1.4185, stop 1.4225, targets 1.4040 and 1.3900. Reward:risk 3.6 / 7.1, medium conviction.
USD/CHF | US dollar vs Swiss franc
USD/CHF Analysis: Channel Floor Near 0.8215 Tests the Uptrend
0.82466 +0.00068 (+0.08%) day Day range 0.82315–0.82478
Outlook: Bias stays higher while the rising channel floor holds. The franc has gained for two sessions on a weaker dollar, though a rise in oil to a one-month high has slowed the move, leaving 0.8298 as first resistance.
Key levels
- Support 2
- 0.8122
- Support 1
- 0.8185
- Resistance 1
- 0.8298
- Resistance 2
- 0.8395
- The decline from the channel top has brought price to the lower line; a close beneath it would expose the 0.81853 average.
- Price is below the 0.82979 faster average but above the 0.81853 and 0.81218 averages; RSI 47.94 sits under its signal line at 60.59.
Setup: Long at 0.8215, stop 0.8170, targets 0.8298 and 0.8395. Reward:risk 1.8 / 4.0, medium conviction.
Conclusion
A softer dollar, French unrest and elevated oil set the tone for the session. We prefer selling rallies in EUR/USD and USD/CAD, and buying support in the pairs that have broken higher. Canadian inflation at 12:30 GMT is the nearest risk, followed by UK unemployment on Tuesday, UK inflation at 06:00 GMT on Wednesday and New Zealand CPI at 21:45 GMT that evening. A close above 1.1270 would challenge the bearish euro view.
Trade EUR/USD, USD/JPY, GBP/USD and other forex with Capital Street FX.
Frequently Asked Questions
What does a falling rate-hike probability mean for the dollar?
Lower odds of a rate rise reduce the yield advantage of US assets, which tends to weigh on the dollar. Hot inflation data can keep options open, so reactions often fade quickly.
How does oil affect the Canadian dollar and the Swiss franc?
Canada exports crude, so higher prices usually support export income and the Canadian dollar. Switzerland imports energy, so the franc relies more on safe-haven demand than on terms of trade.
Why does USD/JPY react to Bank of Japan comments?
Hawkish remarks raise the chance of higher Japanese rates and narrow the yield gap with the US. Traders also watch for official intervention near multi-month highs, which can reverse moves quickly.
How should traders read a channel breakout on a daily chart?
A close above a falling channel suggests selling pressure is easing. Confirmation usually needs a retest that holds and a close beyond the next moving average; failed retests often return price into the channel.
