The EUR/USD pair faced renewed selling pressure last week, though bears failed to break below a key support level despite reaching a fresh yearly low after the European Central Bank's (ECB) announcement on Thursday. The pair had previously attempted a rebound but lost momentum above 1.1250, setting a cautious tone as the year approaches its final months.
Bears have dominated the pair for the past two months, with a steep decline from a high of 1.1700 in August. The pair found temporary support around 1.1100 in mid-October, marking its most oversold condition on the daily chart since 2015. However, this support is now under threat, with buyers showing little interest in reversing the downtrend.
From a technical perspective, the pair's horizontal support coincides with a series of lower highs, forming a descending triangle, a bearish breakout pattern. Meanwhile, any bullish scenario would require a significant shift, including a reduction in global risk-off sentiment that has boosted demand for US Treasuries and weakened the euro.
With ECB President Christine Lagarde announcing her early departure, there is speculation that a leadership change could inspire a Draghi-like pledge of unity, potentially easing the selling pressure. For bulls to gain control, the pair would need to break above 1.1200 and then 1.1263, signaling a stronger reversal potential.