EUR/USD remains one of the most strategically important major pairs this week, and we currently hold a bearish tactical bias. The Federal Reserve delivered a 25 bp “insurance cut” and pushed back firmly against the idea of an automatic follow-up cut in December. U.S. front-end yields stayed supported and the dollar caught a fresh bid. At the same time, the European Central Bank is widely expected to hold rates while acknowledging soft Eurozone growth and moderating inflation, which leaves very little near-term hawkish support for the euro. Technically, EUR/USD has already broken below the 1.1600 figure and continues to trade heavy, with rallies stalling in the 1.1650–1.1685 area and downside continuation levels opening toward 1.1540 and potentially 1.1390 if the recent dollar strength extends. In addition, spot has repeatedly been pinned around large expiry strikes near 1.1600 – 1.1650 into the 10am New York options cut, creating a clear pattern where EUR/USD grinds sideways into the expiry window and then releases lower once dealer hedging flows roll off. For traders, that combination, supportive USD policy narrative, a reluctant ECB, a bearish technical structure, and predictable liquidity/flow dynamics, creates a defined, high-conviction short setup with attractive asymmetric downside potential. EURUSD Trade Setup: Pair / Asset Bias & Entries Stop / Invalidation Targets Why A+ (fundamentals, technicals, sentiment/positioning) Near-term catalysts (UK time) EUR/USD (spot ~1.1622) SHORT – Short pops into 1.1650 – 1.1685 (1.1650 is where large EUR/USD expiries have repeatedly sat this week Daily close above 1.1727 invalidates (ActionForex flags 1.1727 as the upside trigger that would flip bias back higher). Secondary: if Lagarde surprises with a hawkish tone and the pair reclaims >1.1700 / 1.1727, we’re wrong about the call and will reassess First take-profit: 1.1560 / 1.1540 Stretch: 1.1390 (next big support / congestion) Fundamentals: The Fed cut 25bp to 3.75% – 4.00% but Powell explicitly said another rate cut in December is “far from a foregone conclusion,” and noted the Committee is divided. That yanked odds of a December cut sharply lower and pushed the dollar higher. US 2y/10y yields ticked up, DXY +0.6%. Meanwhile the ECB is widely expected to hold today (deposit 2%), with soft Eurozone growth and inflation drifting toward 2 – 2.6%, i.e. no hurry to tighten. Policy divergence = USD > EUR right now. Technicals: EUR/USD already cracked under 1.1600 after the Fed (“tumbles … drops over 0.4% … cleared the 1.1600 figure”), and ActionForex says below 1.1540 opens 1.1390. Resistance sits 1.1685 / 1.1727. So rallies into 1.1650 – 1.1685 are sell zones and downside structure is intact. Sentiment: Repeatedly this month the heaviest listed FX option expiries have been clustered in EUR/USD around 1.1600 – 1.1650 into the 10am New York cut, acting like a price “magnet” and pinning spot before big data / central banks. (e.g. 1.1600 on 21 Oct; 1.1650 on 29 Oct, with spot “weaving in and around the expiries level”). Dealers hedging those strikes dampen EUR/USD upside into the cut; once those expiries roll off, spot has been able to extend lower when USD is strong. This favors “sell pop / then press it after expiries.” 30th Oct: 10:00 UK – Eurozone flash HICP. 13:15 UK – ECB rate decision, 14:00 UK Lagarde presser. 14:00 UK – 10am NY cut option expiries roll off (EUR/USD strikes around 1.1600 – 1.1650 have been the magnet this week). Chart by TradingView – EURUSD Trade Setup – 30th Oct Conclusion We view EUR/USD rallies into 1.1650 – 1.1685 as opportunities to engage on the short side, with invalidation only if price can base and hold above 1.1727, the level that would signal a shift in bullish control and force us to reassess the idea. Our preferred downside milestones are 1.1560 / 1.1540 initially, then 1.1390 if bearish momentum accelerates following key macro catalysts. The immediate drivers to watch are Eurozone inflation data, today’s ECB decision and press conference tone, and the U.S. inflation/wage data that will either reinforce or challenge the Fed’s “hawkish cut” stance. As always, this view is contingent on disciplined risk management: the setup is A+ only while the macro divergence (USD > EUR), the technical structure (lower highs / exposed lows), and post-expiry flow backdrop (EUR/USD unpinning after the NY cut) continue to align. For similar FX Trade Setups please visit our FX Trade Ideas page. 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