The EUR/USD pair has seen modest recovery amid a lack of major news, with the dollar easing slightly along with bond yields and oil prices. This rebound comes after the euro faced downside risks, though the overall outlook remains bearish. The pair has posted five consecutive weekly losses, signaling strong bearish momentum.
Looking ahead, the US Consumer Price Index (CPI) data due on Wednesday will be a key focus. A modest upside surprise in inflation could strengthen the dollar, while a report in line with expectations may only cause slight weakness. The dollar's positioning is currently stretched, but a reversal isn't expected without a clear macro catalyst.
On the euro side, the economic calendar is light, with markets already pricing in a December rate hike by the European Central Bank. Concerns over French government bonds weakening further add to the unfavorable backdrop for the euro. The technical analysis suggests the pair faces significant resistance at 1.1215/20, with downside targets at 1.1150 and potentially as low as 1.1000.