No major events are expected today.

The euro is receiving moderate support following the release of the preliminary inflation estimate for the eurozone for September: the figure accelerated to 2.2% year-on-year, slightly above the ECB’s target. This reduces the likelihood of further monetary stimulus in the coming months and supports expectations of a rate pause. Combined with falling energy prices and signs of resilient domestic demand, this provides a fundamental cushion for the euro at current levels.

In the United States, the dollar remains sensitive to expectations regarding the Fed’s October decision: the market is pricing in a high probability of a 25-basis-point rate cut, which is moderately weighing on yields and the dollar’s exchange rate. Meanwhile, news surrounding the temporary government shutdown increases uncertainty, reducing risk appetite but not offsetting the overall easing effect of U.S. monetary policy in the coming weeks.

The combination of more “sticky” inflation in the eurozone and a likely Fed policy easing creates a differential in favor of the euro. Against this backdrop, we expect the pair to attempt to consolidate above current levels toward 1.18. Risks to this scenario include a deterioration in business activity in Europe and a sudden rise in demand for safe-haven assets in the U.S., which could temporarily revive interest in the dollar.

Recommendations: BUY 1.1725, SL 1.1685, TP 1.1800.