21.09.202604:45 Forex Analysis & Reviews: EUR/USD Overview. September 21. A "Black Swan" Saved the Dollar Again

The EUR/USD pair showed no notable moves on Friday, and last week's price action effectively ended Wednesday evening. On Wednesday, after the Federal Reserve meeting delivered the first policy tightening in three years, the US dollar leaped higher — capping a week in which markets had already been pricing a Fed rate hike. Indeed, the Fed's tone proved more hawkish than many expected, and the dollar's advance seems a logical reaction. However, in 2026 the dollar's gains have largely come only from "black swan" events.

Recall that the year began with the pair near $1.20 and a clear northward bias. Then Donald Trump opened a conflict with Iran and capital fled risky assets into safe havens — and into dollars as the preferred vehicle. For roughly six months, geopolitical risk supported the dollar. Later, with energy prices rising, inflation accelerated globally, notably in the US. Central banks began to lean toward tightening, and markets actively priced in Fed hikes. Despite the European Central Bank hiking twice and the Bank of England likely to follow later in the year, only the dollar has been visibly rising on the tightening narrative.

On one hand, this is explainable: the US dollar remains the world's primary currency, so traders focus first on the Fed rather than the ECB or BoE. On the other hand, this begs the question: why follow euro-area or UK macro stats and central-bank moves at all if markets largely ignore them?

By late September, the FX landscape looks curious. The dollar's rise seems coherent, yet many fundamentals that argue against it are being ignored. The dollar has posted an impressive short-term rally, but the basis for its continuation remains unclear. Two "black swans" have aided the dollar this year, and even with this support, the dollar's recent performance amounts largely to a correction. On the weekly chart, the market has been in a broad sideways range over the past year, and the 2022 uptrend remains the dominant long-run structure.

Thus the technical picture is simple: wait for the correction to complete — it has been running for about a year — and then the euro should be positioned to start a new long-term advance. We do not believe Fed rate hikes will rescue the dollar's long-term prospects. The political factor associated with Trump is, in our view, more important, and it is negative for both the US economy and the dollar.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of September 21 is 55 pips and is classified as "medium." We expect the pair to trade between 1.1430 and 1.1540 on Monday. The higher linear-regression channel points up, indicating an uptrend. The CCI entered the oversold area for the second time and has already formed two bullish divergences, warning of a possible end to the downward correction.

Nearest support levels:

S1 – 1.1475

S2 – 1.1414

S3 – 1.1353

Nearest resistance levels:

R1 – 1.1536

R2 – 1.1597

R3 – 1.1658

Trading recommendations:

The EUR/USD pair continues to move in a downward vein, but we still view the decline as a correction ahead of a new long-term uptrend. The global fundamental backdrop for the dollar remains negative, but in 2026, geopolitics first and then the Fed's hawkish stance provided strong support for the US currency. With price below the moving average, consider short positions with targets 1.1430 and 1.1414. Above the moving average line, long positions remain relevant, with targets at 1.1597 and 1.1658.

Explanations for Illustrations:

Regression channels help determine the current trend. If both are directed in the same direction, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should be conducted at present;

Murray levels are target levels for moves and corrections;

Volatility levels (red lines) are the probable price channel within which the pair will spend the next 24 hours based on current volatility indicators;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.