EUR/USD remains under pressure as French government bond yields stay elevated amid fiscal and election worries. So far, the ECB has given no sign that it will step in to ease the selling pressure on those bonds. As a result, buyers are likely to stay on the sidelines rather than catch the falling knife. They may not return until the pair nears the 1.0500–1.0600 area or until concerns over France's fiscal and election outlook fade.

Technical signals suggest the downtrend can extend. RSIs and widening Bollinger Bands point to more volatility and continued downward momentum. The pair's ongoing consolidation of its drop from the September 25 high reinforces the bearish outlook, as does its hold below the declining 10- and 21-day moving averages. Sentiment also appears fragile hurt because rallies within the downtrend from the January 2026 high have been sold consistently.

EUR/USD is currently hovering above structural support in the 1.1050–1.1100 zone. This area contains a series of monthly highs and lows going back to 2023, as well as the 50% retracement of the February 2025 to January 2026 rally.

The more important level, however, is the 1.0500–1.0600 zone. Structural support sits near the psychological 1.0500 mark. The zone also contains the 76.4% Fibonacci retracement of the 1.0125–1.2084 rally and the base of the rising trend channel from the 2022 yearly low. Significant and sustained EUR/USD buying may therefore not appear until these levels are reached.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)