EUR/USD Crashes Toward 1.1160: Can 1.1194 Trigger a Technical Rebound?

Forex

Summary:

EUR/USD has fallen to a 17-month low near 1.1161 as French fiscal and political concerns trigger renewed euro selling, despite sharply reduced expectations of an October Fed hike...

BUY EURUSD

EXP

TRADING

1.11948

Entry Price

1.12400

1.11600

1.12050 -0.00457 -0.41%

0.0

Pips

Flat

1.11600

Exit Price

1.11948

Entry Price

1.12400

Overview

EUR/USD has entered a much more aggressive bearish phase than anticipated after breaking below 1.1250 and 1.1200. The pair reached approximately 1.1161 on October 5, its lowest level since May 2025, with the euro falling despite weaker-than-expected US employment data. The dominant catalyst is now European rather than purely US monetary policy: escalating French fiscal concerns and political uncertainty have generated fears of contagion across the Eurozone. French 10-year yields have surged relative to German Bunds, highlighting rapidly deteriorating confidence in French public finances.

This is important because the normal bullish catalyst for EUR/USD, weaker US employment and reduced Fed-hike expectations, is currently being overwhelmed by euro-specific risk. Markets now see less than a 20% chance of an October Fed hike, compared with 64% one week earlier, yet EUR/USD has still collapsed.

At 1.1194, however, the trade is positioned close to the newly established extreme rather than chasing the decline around 1.1250. Today's range has already extended from 1.1256 to 1.1161, demonstrating substantial downside exhaustion potential.

Market Sentiment

Sentiment remains decisively bearish toward the euro. EUR/USD has now recorded four consecutive weekly declines, while the dollar is benefiting from safe-haven demand generated by global bond-market stress.

The contrarian argument for the BUY is positioning and momentum rather than fundamentals. EUR/USD is approaching a major psychological zone around 1.1150–1.1160, while RSI is approximately 32.5 and CCI is deeply oversold. The technical dashboard is classified as Strong Sell, but this combination also indicates that downside momentum is becoming stretched.

The critical distinction is that oversold does not automatically mean reversal. The French fiscal shock can continue generating euro selling. Therefore, 1.1194 should only be treated as a tactical rebound entry, with 1.1160 acting as the structural invalidation area.

Technical Analysis

EUR/USD Crashes Toward 1.1160: Can 1.1194 Trigger a Technical Rebound?_1

Using Bollinger Bands (20,0,2), Ichimoku (9,26,52) and Stochastic (5,3,3) on M15, the BUY at 1.1194 is based on price exhaustion near the lower Bollinger Band after an unusually extended downside move. The preferred confirmation is an M15 rejection below 1.1190 followed by a close back inside the Bollinger Bands.

For Ichimoku (9,26,52), the structure remains strongly bearish because price is below the Kijun and cloud. The first meaningful confirmation would be a higher low around 1.1180–1.1190 followed by a Kijun reclaim. Until that occurs, this remains a counter-trend scalp.

For Stochastic (5,3,3), a bullish crossover from the lower zone would provide the preferred trigger. The first recovery target is 1.1225, followed by 1.1240–1.1250, where current pivot and breakdown resistance is concentrated. A break below 1.1160 would invalidate the rebound thesis and expose 1.1150, then potentially 1.1080.

Trade Recommendation

Entry: 1.1194

Take Profit: 1.1240

Stop Loss: 1.1160

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