The EUR/USD currency pair has experienced a significant decline, dropping more than 5% from its August highs. This downward trend has persisted for five consecutive weeks, but the pair recently snapped this losing streak with a rebound. The decline has now reached a critical technical support zone, raising the possibility of a larger price inflection.
The support zone in focus is around 1.1110/63, a region defined by key technical levels including the 38.2% retracement of the broader 2022 advance, the 2024 high-week close, and the 2025 May low-week close. Weekly momentum indicators have deteriorated, but the broader bearish outlook remains intact. Bulls face significant resistance overhead, with a stronger recovery needed to suggest a more meaningful low is in place.
Key resistance levels are identified at 1.1276 and 1.1355/65, with a breach above this zone required to indicate a more significant low. Subsequent resistance objectives are eyed at the median line of the yearly downtrend near 1.1430s and the 61.8% retracement of the August decline at 1.1483. A break below last week’s low could trigger another accelerated decline, with subsequent support objectives at 1.1030s and 1.0905.
Next week's event risk includes Eurozone and U.S. PMI data, which could shape expectations ahead of the Fed and ECB rate decisions later this month. The PMI release on Friday will be particularly important, as it could directly influence the ECB’s October 29 meeting. Fed officials are in a blackout period ahead of their October 27-28 decision, adding to the significance of the upcoming data releases.