EUR/USD Reclaims 1.1240: Can the Euro Extend the Recovery Toward 1.1300?

Forex

Summary:

EUR/USD has rebounded sharply from Monday’s 17-month low near 1.1161 and is now trading around 1.1250, as easing French bond-market stress temporarily reduces pressure on the euro. ...

BUY EURUSD

EXP

PENDING

1.12400

Entry Price

1.12900

1.12150

1.12237 -0.00351 -0.31%

Pips

PENDING

1.12150

Exit Price

1.12400

Entry Price

1.12900

Overview

EUR/USD has staged a meaningful recovery after Monday’s aggressive sell-off. The pair fell to approximately 1.1161, its lowest level since May 2025, before rebounding above 1.1250. The immediate catalyst has been a reduction in French sovereign-risk pressure: French bond yields eased and the spread versus German Bunds narrowed, allowing investors to unwind part of the recent euro short positioning.

The US side is also less supportive of the dollar than it was at the beginning of the week. September US payroll growth was extremely weak, causing markets to sharply reduce expectations for an October Fed hike. This has limited the dollar’s upside even though US Treasury yields remain elevated. Today’s Reuters market report shows the dollar index falling 0.26%, while EUR/USD has recovered to around 1.1252.

For a BUY at 1.1240, the important change is structural rather than simply fundamental. The pair has moved from 1.1161 to above 1.1250 in a short period, meaning sellers who entered during the breakdown are now facing pressure. If 1.1240 holds as a higher low, the rebound can extend toward 1.1280–1.1300.

Market Sentiment

Sentiment is improving but remains fragile. French fiscal concerns had previously pushed EUR/USD below 1.12 and created expectations of a possible move toward 1.10. The subsequent decline in French yields has temporarily reduced that tail risk and produced the strongest daily euro recovery in roughly a month.

The important insight is that the euro does not need a strongly bullish fundamental catalyst to continue recovering in the short term. It only needs the dollar's existing advantage to weaken while heavily short euro positions unwind. That is exactly the environment created by weaker US employment data and easing French bond stress.

Nevertheless, 1.1240 remains a critical line. Orbex identifies 1.1240 as the key daily resistance level: a sustained close above it could open the way toward 1.1330–1.1350, while failure below it would restore downside pressure toward 1.1160 and potentially 1.1065.

Technical Analysis

EUR/USD Reclaims 1.1240: Can the Euro Extend the Recovery Toward 1.1300?_1

Using Bollinger Bands (20,0,2), Ichimoku (9,26,52) and Stochastic (5,3,3) on M15, the BUY at 1.1240 is based on a support-retest structure. Price has recovered strongly from the lower Bollinger Band, and the preferred scenario is for 1.1240 to hold while the middle Bollinger Band develops into dynamic support.

With Ichimoku (9,26,52), the broader structure remains bearish, but the M15 setup improves substantially if price holds above the Kijun-sen and begins forming higher lows. A break through the cloud would provide stronger confirmation of a short-term reversal.

For Stochastic (5,3,3), the ideal signal is a bullish crossover after a pullback toward 1.1240 rather than buying an already extended candle. The first resistance is around 1.1275–1.1280, followed by 1.1295–1.1300. Current technical data places the daily pivot around 1.1247, S1 near 1.1218 and R1 near 1.1296.

A sustained M15 break below 1.1215 would weaken the setup, while a failure to hold 1.1200 would reopen the path toward 1.1160.

Trade Recommendation

Entry: 1.1240

Take Profit: 1.1290

Stop Loss: 1.1215

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