EUR/USD Hit a 17-Month Low on Lagarde's Exit News — Then Closed Higher as Gold Held $4,000

Thursday gave forex traders a textbook lesson in why the first move after a central bank decision is rarely the real one. The European Central Bank held rates, and on the same day announced that Christine Lagarde will step down on February 7, 2027. EUR/USD fell to 1.1105, its lowest since May 2025 — a 17-month low — and then did something the panicked first reaction did not predict: it closed 0.24 percent higher at 1.11796, its highest close since October 23. A pair that makes a 17-month low and then closes higher on the same day is not a pair in free fall. It is a pair that found buyers at a level the market had been watching for months, and the rest of Thursday's tape — gold holding $4,000, the pound at a week high, the yen stuck above 157.50 — tells the same story of a dollar that could not extend its gains.

Start with the euro, because the sequence matters. The low of 1.11044 on one feed came just four minutes after the ECB decision, below 1.1111, a level analysts had flagged as the point where a firm break would extend the pair's larger fall. It did not extend. Instead, buyers stepped in and the pair recovered the whole drop and more by the close. That kind of intraday reversal — new low, higher close — is one of the more reliable signs in forex that the immediate selling is exhausted, at least for now. It does not mean the downtrend is over: EUR/USD is still down 0.45 percent over five days and 5.00 percent year to date at 1.1162, and the 52-week range of 1.1105 to 1.2083 shows how far the pair has fallen from its highs. But it does mean the next test is now clearly defined. Orbex's desk puts support at 1.11150 and resistance at 1.12400 to 1.12800, with EUR/USD trading near 1.11861 early on October 30, up 0.08 percent on the day, with a day range of 1.11727 to 1.12148. Above 1.1200, the path toward 1.1250 opens; below 1.1115, the 17-month low is back in play and the larger fall resumes.

Gold's role in the day deserves its own paragraph, because it is the other side of the same dollar trade. Gold fell 0.96 percent to $4,017.50, its lowest close since October 26 — but that was still its fourth consecutive close above $4,000, with the day's low of $4,005.20 holding just $5.20 above the round number. A market that falls almost 1 percent and still defends a major psychological level is telling you the buyers have not left; they are just letting the price come to them. For a gold trader, $4,000 is now the line in the sand in both directions: hold it, and the uptrend's structure survives another test; lose it, and the next stops are $3,900 and then $3,800, levels analysts are already flagging. The metal's resilience matters for EUR/USD too, because both trades are, at heart, trades against dollar strength — and on Thursday the dollar could not push either one through its key level.

The rest of the board confirmed the dollar's stumble rather than contradicting it. The pound rose 0.37 percent to 1.33762, its highest close since October 22. USD/JPY closed at 157.705, its third consecutive close above 157.50 — the one place the dollar did hold its ground, and a level worth watching into Friday, with analysts noting the pair may dip toward 157 before bouncing toward 158 and above. USD/CAD slipped 0.04 percent to 1.39887, below each of its previous ten closes, though it traded below the 1.3985 level analysts had set as a tell without closing there. The pattern across all of them is consistent: the dollar made its move on the ECB news, and then gave most of it back. That is not a dollar collapse. It is a dollar that is running out of fresh reasons to rise at exactly the moment the market is pricing an 85 percent chance of a December Fed hike — a hike that, if it comes, is already largely in the price.

The macro backdrop explains why the dollar's job is getting harder. US third-quarter GDP grew 3.4 percent at an annual rate, beating the 3.2 percent consensus, and September core PCE inflation held at 3.1 percent year on year. The Fed held rates at 3.75 to 4.00 percent on October 28, with two members dissenting in favour of a hike. Strong growth plus sticky inflation should, in the textbook, push the dollar higher and yields with it. But the 10-year Treasury yield fell back below 5 percent to 4.98 percent on Thursday, and overnight the Bank of Japan held its key rate at 1.25 percent in an 8-1 vote. When strong data fails to lift the dollar or yields, the market is saying the easy part of the dollar trade is done — and that is the environment in which a 17-month low in EUR/USD becomes a buying opportunity rather than a breakdown.

What to watch next, in order. First, whether EUR/USD holds above 1.1115 on a closing basis — a daily close below it reopens the larger fall toward 1.1000. Second, whether gold holds $4,000 into the US session; a loss there would signal that the dollar's buyers are back in force. Third, USD/JPY around 157.50: a third close above it held, but a dip toward 157 that fails to bounce would change the yen story quickly. And fourth, the calendar: the next high-impact US release is job openings (JOLTS) on November 3. Until then, Thursday's message stands: the euro made a 17-month low, gold defended $4,000, and the dollar could not keep what the morning gave it. In forex, that is often how turning points start — not with a dramatic reversal, but with a low that refuses to stay low.

FAQ:
How low did EUR/USD go? To 1.1105, its lowest since May 2025 — a 17-month low — hit minutes after the ECB held rates and announced Christine Lagarde will step down on February 7, 2027.
Where did it close? Up 0.24 percent at 1.11796, its highest close since October 23, after recovering the entire intraday drop.
What are the key levels now? Support at 1.11150, resistance at 1.12400 to 1.12800; early October 30 trading near 1.11861, with a day range of 1.11727 to 1.12148.
What did gold do? Gold fell 0.96 percent to $4,017.50, its lowest close since October 26, but held above $4,000 for a fourth straight close; the day's low was $4,005.20.
What about the other majors? The pound rose 0.37 percent to 1.33762 (highest close since October 22); USD/JPY closed at 157.705, a third close above 157.50; USD/CAD slipped to 1.39887.
Why did the dollar fail to extend its gains? Strong US data (Q3 GDP 3.4 percent, core PCE 3.1 percent) and a December Fed hike priced near 85 percent were already in the price, and the 10-year yield fell to 4.98 percent instead of rising; the Bank of Japan also held at 1.25 percent overnight.
Is this the same story as daija94_I4Rx's first forex article? No. That article (blog 316) was a general EUR/USD piece after the Fed hold. This blog covers the specific October 29 ECB session: the 17-month low, Lagarde's exit announcement, the higher close, and gold's $4,000 defence.

Related reading:
https://zimbuck.com/pages/zimbucknews
https://zimbuck.com/groups/zimbuckmarketnews
https://zimbuck.com/blogs/316/EUR-USD-After-the-Fed-Hold-Why-the-Dollar-Isn

This is market news and general information only, not financial advice.