Euro rises near 1.1250 as US midterm election uncertainty weighs on the dollar
ITF Team3 min read
Euro climbs to about 1.1240 on 11/4/2026 amid US midterm election doubts and hawkish ECB comments, with resistance near 1.1255 and support at 1.1195.
Key takeaways
- Euro/USD traded around 1.1240 in early Asian session on 11/4/2026.
- ECB Governing Council member Joachim Nagel signalled a likely December rate hike, boosting euro sentiment.
- US midterm election uncertainty pressured the dollar, limiting further euro gains.
- Technical resistance sits near 1.1255 while support is at 1.1195 on the daily chart.
The euro edged up to roughly 1.1240 against the US dollar in early Asian trading on 11/4/2026, as uncertainty surrounding the United States midterm elections kept the greenback under pressure. The move was reinforced by fresh hawkish remarks from European Central Bank (ECB) officials, suggesting further rate hikes later in the year.
Election uncertainty and dollar weakness
Midterm voting in the United States is set to decide the balance of power in Congress, with the House still largely undecided and the Senate requiring a net gain of four seats for Democrats to take control. The mixed early projections have heightened market caution, prompting some investors to shy away from the dollar ahead of the September jobs report later in the week.
The political backdrop has created a modest sell‑off in USD‑based assets, allowing the euro to recover from recent lows. While the dollar remains the world’s reserve currency, any perception of policy uncertainty can quickly translate into short‑term weakness, especially when paired with a central bank that appears ready to tighten further.
ECB hawkish signals lift the euro
ECB Governing Council member Joachim Nagel told reporters on Tuesday that the central bank will probably raise borrowing costs in December, citing a worsening inflation outlook. The comment followed the ECB’s decision to hold rates steady last week after two hikes earlier in the year, and it aligns with other officials, such as Council member Radev, who warned that the October pause does not signal the end of tightening.
Scotiabank analysts note that December OIS contracts are pricing in about 22 basis points of tightening risk, reinforcing expectations that the euro could benefit from a widening rate differential versus the Fed, especially if US policy remains unchanged amid election concerns.
Read also: NZD/USD stalls after weak USD gains and RBNZ dovish tilt
Technical picture: bearish bias under the 100‑day SMA
On the daily chart the pair remains below its 100‑day simple moving average (SMA) near 1.1420, indicating a prevailing bearish bias. Price is perched just above the 20‑day Bollinger Bands’ middle line, with the upper band at 1.1255 acting as immediate resistance. The Relative Strength Index (RSI) sits at 46, below the neutral 50 level, suggesting limited upward momentum.
Key support lies at the Bollinger middle band around 1.1195, with a deeper floor near the lower band at 1.1135. A close below the lower band would likely confirm the bearish structure and could open the path to further declines toward the 100‑day SMA.
Broader context and what to watch
Beyond the political and monetary factors, commodity markets show mixed signals. Crude oil prices have slipped this week, yet natural gas and power prices in Europe remain elevated, keeping inflationary pressure on the ECB’s radar. France’s September year‑to‑date budget balance matched expectations at €159.2 billion, removing a potential fiscal surprise from the eurozone’s risk equation.
Traders should monitor the upcoming US September jobs data, which could clarify the Fed’s stance, and any further ECB communications that may confirm or adjust the December hike outlook. On the technical side, a break above 1.1255 would signal a short‑term bullish reversal, while a dip below 1.1195 could trigger a move toward the 100‑day SMA.
- US midterm election results (Nov 5‑6, 2026)
- US non‑farm payrolls, Sep 2026
- ECB policy meeting, Dec 2026
Frequently asked questions
Why did the euro rise despite a generally bearish technical outlook?
The euro’s rise to about 1.1240 was driven by hawkish comments from ECB officials, especially Joachim Nagel’s suggestion of a December rate hike, which widened the euro‑dollar rate differential and offset the bearish bias shown by the 100‑day SMA.
How might US midterm elections affect the EUR/USD pair?
Uncertainty over which party will control Congress has kept the dollar under pressure, limiting its upside. If the elections produce a clearer policy direction, the dollar could regain strength, potentially pulling EUR/USD lower.
Official data sources
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This article is compiled from international market news for information only. It is not investment advice.