EUR AI Market Pulse, Thursday, 12 November 2026
JAFX AI’s read of the news on EUR (Euro), as it stood at the end of the day: read at 23:27 UTC.
Bias: bearish
EUR heavy at 18-month lows near 1.1050 after breaking October's floor. Fed hike repricing drives it, ECB December hike is fully priced, and 1.1000 is the next magnet.
EUR/USD extended a third daily fall to around 1.1050, slipping below the 1.1066 intraday low. That followed a brief afternoon steadying near 1.1087 when higher-than-expected US jobless claims trimmed USD gains. DXY pushed past 103.00 to fresh 18-month highs on Fed Waller's opening to a 50bp December hike and a softer risk tone. ECB rhetoric (Lane: decisions data-dependent despite falling energy prices) and growth worries capped any euro rebound.
The past week
The pair is down from near 1.1200 at Monday's close after hot US CPI (0.4% m/m) and hawkish Fed commentary widened two-year swap differentials by about 15bp in USD's favour. It lost the 200-week MA and the 50% retracement at 1.1110 and closed Wednesday below October's lows. Eurozone data were uneventful: final German HICP was confirmed at 2.8% y/y and -0.1% m/m, in line. Heavy ECB speaker traffic, including two Lagarde appearances, did not shift the consensus for a single December hike.
The bigger picture
The regime is policy divergence. The US economy is outperforming, with the Fed possibly accelerating hikes, while the ECB nears a 2.75% peak with inflation still around 3%. Risks to the euro are piling up: ECB succession in February, French presidential uncertainty into April, and typically bearish early-year euro seasonality. SocGen has a 1.10 year-end target and called EUR/USD down 10 big figures since January.
Positioning
A 25bp ECB hike to 2.75% is unanimous consensus (71/71 in the Reuters poll), so the ECB offers little fresh support. Most see a 2.75% peak, so the euro's terminal-rate upside is limited. The swing factor is how far the market moves toward a 50bp Fed hike in December. ING argues a decisive break of 1.1000 needs that fully priced, while three straight down days and near-oversold RSI leave room for short-covering bounces that sellers have so far used.
Scenarios it set out
- EZ Q3 GDP below 0.4% q/q (f/c 0.4%; y/y f/c 1.3%) and/or employment below 0.2% Growth concerns validate a one-and-done ECB; EUR/USD likely extends toward 1.1000, which ING flags as solid support, with 1.0951 below if it gives way.
- GDP in line or above 0.4% q/q, plus hawkish-leaning Schnabel remarks Limited euro relief given the ECB hike is already priced; bounces likely capped by the 1.1090–1.1100 area and the 1.1110 former support (200wma).
- Hot US PPI later Friday or hawkish Williams/Bowman adding to 50bp December pricing USD extends gains, with DXY holding above 103.00. That is the scenario ING says is needed for a decisive EUR/USD break below 1.1000, opening 1.0951.
What it said to watch
- Whether EUR/USD holds 1.1000 on a daily close: ING sees solid support there, SocGen warns of a 'slippery slope' if it breaks
- 1.1090–1.1100 and 1.1110 (200wma / 50% retracement) as the ceiling on any short-covering bounce
- Market-implied odds of a 50bp Fed hike in December and the US–EZ 2-year swap spread
- DXY holding above 103.00
- Schnabel's tone on hikes beyond December (25 of 71 economists see one in Q1 2027)
- Euro crosses for relative strength: EUR/GBP 0.8350 support / 0.8370 cap, EUR/JPY 177.03 EMA / 175.07 12-month low
Risk ahead, as it saw it
Fri 13 Nov: EU leaders summit (00:00 UTC) and ECB's Schnabel (07:10). National inflation finals at 07:45 (CPI EU norm f/c 3.8% y/y) and 08:00 (HICP f/c 4.9% y/y). Eurozone Q3 GDP and employment at 10:00 (GDP f/c 0.4% q/q, 1.3% y/y; employment f/c 0.2% q/q). US PPI and Fed's Williams/Bowman follow later Friday and are the bigger EUR/USD swing factor. Mon 16 Nov: EZ industrial production at 10:00.