Brokers from Rubinax dive into the latest EUR/USD picture, as the pair steadies above 1.12 after a shaky start to the week, while soft economic data and fragile politics in Europe limit the room for a rebound.
A Tentative Bounce After A Weak Open
The euro began the week with a downward gap and briefly traded under 1.12. Buyers stepped in on Tuesday, but the move stalled short of the falling 20-day average near 1.1257, the same line that stopped Friday’s advance.
A market that cannot even reach the first overhead average is usually still correcting, not starting a new uptrend. The bounce should therefore be treated with caution.
The Daily Chart Still Leans Bearish
Momentum has sat below zero for several weeks, and the moving averages are lined up in a negative order. Two of the longer ones are close to completing a bearish cross, which would add to the weak tone.
The low reached on October 14, near 1.1112, was the weakest level since early 2025, and a long-term average held it. Any modest recovery from there may simply be a pause before another push lower.
Politics Is The Main Driver
Events in Europe, especially in France, now matter more to the euro than US data. The first clues about direction are likely to come from that side.
France has been calmer lately, yet the currency responded only slightly. That suggests investors remain wary and are not ready to bet on lasting stability.
Soft Data Adds To The Pressure
Economic figures from the euro area have not helped. The current account surplus shrank sharply in August, falling to under a third of the July level, and the sentiment index for October dropped well below September’s reading.
Meanwhile, French borrowing costs have risen relative to those of larger neighbors. That gap is a sign of stress, because investors want extra compensation to hold French debt.
Support Below The Market
A loss of 1.1200 would raise the risk of a new test of the 1.1130 to 1.1120 area. That zone marks the half-way point of the long advance from 1.0177 to 1.2082 and also coincides with a major long-term average.
If it fails, the break would point to further declines. Until then, the pair may keep moving between support and resistance, and each failed rebound would reinforce the negative bias.
What A Recovery Would Need
Moving above the 20-day average would bring some relief, but it would not confirm a bullish turn. A real shift would need a push through the 1.1320 to 1.1340 zone.
That area includes the June 24 low and the 38.2% retracement of the drop from 1.1711 to 1.1112. Until price clears it, rallies are more likely to fade than to grow into a trend.
What Could Change The Outlook
Lasting calm in French politics, narrower bond spreads or better surveys could improve the picture. A weak US report could also lift the pair without any help from Europe.
On the other side, renewed political tension or another poor data release could send the euro back toward 1.1130. Since these factors shift quickly, traders should follow the news as well as the chart.
The next European data releases deserve attention, since another weak survey would confirm that growth is losing momentum. A stronger reading would not reverse the trend by itself, but it could slow the decline and give buyers time to test the 1.1257 average.
Dollar moves also matter. Even if Europe stays quiet, a firmer US currency could keep the pair under pressure, so traders should follow both sides before acting.
Managing Risk
In a weak market, chasing rallies adds risk. Smaller positions and stops set before entry help, and waiting for a daily close beyond a level is often safer than trading an intraday move.
Calm reactions are rare around political news, so expect sudden, short-lived swings.
Conclusion
EUR/USD trades above 1.12, recovering from a weak open but capped by the 20-day average near 1.1257. The 1.1200 level is the first support to defend, while 1.1320 to 1.1340 is the area buyers must clear.
Traders following EUR/USD strategies should watch French political news, euro area data and the reaction around 1.1200, since these factors are likely to decide whether the pair stabilizes or slides toward 1.1130.