The EUR/USD pair is holding steady at the support level between 1.1550 and 1.1540 as the USD stabilizes after gains from the FOMC meeting. On Friday, the pair is slightly up, trading around 1.1575, an increase of less than 0.10% for the day. The USD’s recent strength helps the EUR/USD pair by preventing major declines. Comments from Fed Chair Jerome Powell indicate a hawkish stance, reducing chances of an interest rate cut in December.

ECB Rate Stability

The European Central Bank (ECB) has kept the key deposit rate at 2%, aiming for medium-term inflation near this level. However, the uncertain economic climate in the Eurozone, due to trade disputes and geopolitical issues, along with mixed opinions on future rate cuts, dampens optimism for the Euro. To see further upward movement during the day, the pair needs consistent buying. If it breaks below the 1.1550-1.1540 support, we could see more losses. The EUR/USD pair is on track for its second straight week of losses, heavily influenced by USD trends. Later on Friday, speeches from FOMC members may also affect the pair. The Euro, used by 20 EU countries, is the second most traded currency, making up 31% of forex transactions in 2022. Key ECB decisions and economic data like inflation rates and trade balances significantly influence its value.

Current Economic Situation

As of October 31, 2025, we are closely monitoring the EUR/USD pair as it defends the crucial 1.1550-1.1540 support zone. The US dollar is solidifying its recent strength following the Federal Reserve’s hawkish meeting, giving temporary support to the pair. However, the Euro’s lack of upward movement raises concerns. The dollar’s strength is backed by recent data, including a robust addition of 215,000 jobs in September’s Non-Farm Payrolls report. The Core PCE Price Index, the Fed’s main inflation measure, remains steady at 2.8% year-over-year, leaving little room for policy easing. This solid foundation indicates that any dips in the dollar may be short-lived. On the other hand, the ECB is dealing with a tougher situation. The most recent flash estimate for Eurozone HICP inflation in October is just 1.9%, below the ECB’s target, which supports their cautious approach. Additionally, German manufacturing PMI shows ongoing contraction, dragging down the economic outlook for the entire region. The gap between a strong Fed and a cautious ECB drives the current market trend. A similar situation occurred in 2023 when aggressive Fed rate hikes pushed the EUR/USD lower. The current conditions suggest that we might see a repeat of that pressure, making any rebounds in the pair prime selling opportunities. For derivative traders, this situation could warrant positioning for a potential decline. Buying put options with strike prices below 1.1540 could be a smart way to profit if this key support level breaks while clearly managing risk. If the support falls, the implied volatility of these options could rise, increasing potential returns. Alternatively, selling out-of-the-money call spreads with strike prices above the 1.1650 resistance area might be an effective strategy, profiting if the EUR/USD remains stable or declines, and collecting premium from a lack of bullish sentiment. A sustained daily close below 1.1540 would confirm the resumption of a bearish trend. Create your live VT Markets account and start trading now.

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