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October 29, 2025

EUR/USD Slides After Fed Cuts Rates and Signals End to QT

Market snapshot — Fed trims rates, ends QT and markets react

The Federal Open Market Committee delivered a 25 basis-point cut to a 3.75%–4.00% target range and announced the conclusion of its balance-sheet reduction on December 1. The decision included two notable dissents (one preferring a larger 50bp cut and one preferring no cut), a split that has added to intraday uncertainty. FX markets reacted quickly: EUR/USD traded in the roughly 1.1650–1.1635 band and slid after the announcement as traders re-evaluated the path for the dollar amid the end of quantitative tightening (QT). For a contrasting recent move when Fed-cut odds weakened the dollar, see EUR/USD climbs.

What this means for EUR/USD

Short-term drivers

The combination of a rate cut and a formal end to QT is conventionally dovish, but complexity in the committee's messaging and the split vote have left markets parsing whether the overall stance is as accommodative as priced. If traders interpret the end of QT and post-meeting guidance as less dovish, the USD can strengthen — putting further downside pressure on EUR/USD. Expect higher intraday volatility and whipsaws as markets digest Powell’s remarks and upcoming U.S. data. For another example of EUR/USD weakness on dollar strength ahead of data, see near two-week low.

Key price levels to watch

Technical traders should monitor the following levels closely:

  • Immediate intraday range: 1.1650–1.1635 (current trading band).
  • Near-term support: 1.1600 then 1.1550 (round-number and liquidity clusters).
  • Resistance on any relief rally: 1.1700 then 1.1750.

Practical trade setups and risk management

High-probability intraday setup

With the current bearish bias, a disciplined short-on-strength approach can work: look for rejections back toward 1.1650–1.1700 with tight intraday stops above 1.1720 and targets toward 1.1600–1.1550. Given the higher volatility environment, reduce position size or widen stops relative to your normal risk parameters to avoid getting stopped out by whipsaws.

Hedging and alternative strategies

Consider hedging USD exposures if you have inventory or positions sensitive to a stronger dollar. Use options or staggered limit orders to manage execution risk. If you prefer automated, rules-based execution to patrol these levels through the session, a Forex Trading Bot or a strategy via the Trade Assistant can help implement intraday short setups and strict risk controls.

Broader implications: safe-havens and cross-asset flow

Gold (XAUUSD)

Gold reacted positively to dovish rate pricing in some windows: post-decision ranges were roughly $3,978–$4,010 with resistances at $4,030, $4,050 and $4,100 and supports near $3,900 and $3,886. A weaker USD would support further XAUUSD strength, but Powell’s tone could quickly reverse flows. Traders should monitor gold as a barometer of safe-haven demand that can accompany FX moves. See related commodity moves for context in our coverage of gold surges.

Cross-currency and commodity-linked moves

Commodity currencies may be influenced by other central bank moves (e.g., Bank of Canada) and commodity price action. Keep an eye on correlated crosses if you’re trading EUR pairs — CAD and AUD moves can amplify or offset EUR/USD directional conviction. Cross‑FX spillovers are visible elsewhere, for example in the USD/JPY reaction to the same Fed move.

Execution and automation: why use rules-based trading now

Events like FOMC decisions create fast, emotion-driven moves. Automated trading and disciplined execution can remove emotional bias and enforce pre-defined risk controls. Retail traders can benefit from using an AI trading bot for consistent entries, dynamic stop management and to scale exposure across short-term setups. Automating intraday scalp or momentum rules reduces the risk of being whipsawed by headlines while permitting rapid order adjustments during volatile windows.

Checklist for traders

Before taking a position

  • Confirm liquidity and spread conditions for EUR/USD on your platform.
  • Define stop loss, take-profit and position size aligned to a pre-determined percent risk.
  • Avoid oversized positions into Powell remarks — let the initial volatility settle.

Monitoring and exit

  • Watch U.S. data releases and Powell’s press conference for re-pricing risk.
  • Use trailing stops or pre-planned time-based exits in fast markets.
  • If managing multiple instruments, consider automated correlation checks to avoid concentration risk.

Conclusion

The FOMC’s 25bp cut and announcement to end QT on December 1 have set up a high-volatility environment that currently favors short EUR/USD setups around the 1.1650–1.1635 area, while keeping an eye on safe-haven flows into gold. Trade with clear stops, size positions for elevated intraday volatility, and monitor Powell’s comments for directional changes. For traders who want disciplined execution and 24/7 monitoring across FX and crypto trading, consider automating your rules with a trading bot. Start with the Trade Assistant or explore the Forex Trading Bot to automate EUR/USD strategies.

For execution notes on managing slippage in fast markets, see our guide on slippage explained.