The EUR/USD exchange rate is steady, showing little change during this session. In September, German retail sales rose by 0.2%. The preliminary Eurozone consumer price index (CPI) also increased by 0.2% monthly, bringing the yearly gain to 2.1%. ECB President Lagarde indicated that the current monetary policy is appropriate, suggesting that further easing is unlikely. **The Spot Rate and Market Movements** The spot rate is holding around the upper 1.15s, with support in the low to mid 1.15s throughout October. If the rate drops below 1.1525, it could face short-term risks, possibly falling to 1.1400/50. Resistance levels are at 1.1575 and 1.1635. Additional market insights include a week-long stall in the Dow Jones Industrial Average, a three-month low for EUR/USD driven by a hawkish stance from the US Federal Reserve, and a seven-month low for GBP/USD due to UK fiscal concerns. Gold prices have dropped below $4,000, marking a second weekly loss, while WTI oil shows slight recovery amid energy market considerations. In 2025, discussions are ongoing about the best forex brokers, specifically those with low spreads and regional focus. This information is for educational purposes only; thorough research is essential before making investment decisions. Be aware that investing in open markets carries risks, including the potential for total investment loss. As of October 31, 2025, the Euro has a soft tone while consolidating in the upper 1.15s against the dollar. The European Central Bank seems satisfied with its current policy, indicating that any future easing will be unlikely, which keeps the currency stable but vulnerable. **US Federal Reserve Impact** The main factor affecting the market is the US Federal Reserve’s hawkish approach, which continues to shape expectations. Recent data from September 2025 shows US inflation at 3.7% and the creation of 336,000 jobs, leading the Fed to adopt a “higher for longer” interest rate stance. This difference in policy is putting significant downward pressure on the EUR/USD. For derivative traders, the support level to watch is at 1.1525. A clear break below this level in the next few weeks could lead to a quicker drop toward the 1.1400 to 1.1450 range. The current consolidation has likely reduced volatility, making options strategies cheaper. Given this outlook, buying EUR/USD put options with strike prices below 1.1500 may be smart. This strategy allows for risk management while providing a chance to profit from a potential decline, especially if the US dollar strengthens as expected. It offers exposure to a drop without the unlimited risk often associated with short futures positions. We recall a similar situation in 2022, where the hawkish Fed and a more cautious ECB caused a significant drop in the EUR/USD, which eventually fell below parity. While the current levels differ, the ongoing divergence in policies is a strong indicator of possible future strength for the dollar. Create your live VT Markets account and start trading now.

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