EUR/USD: Recent euro weakness stalled at 1.1530 key medium-term support with a minor “Double Bottom” bullish breakout

[Redator]

Key takeaways

• Euro weakness stabilizes: EUR/USD’s recent 3.25% drop from its September high has stalled at the key 1.1530 medium-term support level.
• French political uncertainty eases: The reappointment of Prime Minister Lecornu and reduced sovereign risk premiums have helped calm Eurozone markets.
• Technical setup remains bullish: Price action forms an “Ascending Triangle” pattern, signaling a potential continuation of the medium-term uptrend.
• Short-term breakout confirmed: A minor “Double Bottom” bullish breakout above 1.1625 suggests upward momentum toward 1.1690 and 1.1760.

The euro has suddenly lost its sparkle ex-post September’s FOMC, after it hit a four-year high of 1.1919 against the US dollar on 17 September 2025. The EUR/USD dropped by 3.25% (high to low) to print an intraday low of 1.1542 on 9 October 2025.

This article will look at several key technical/momentum factors to argue that the recent weakness of the EUR/USD is likely a bullish consolidation phase within a medium-term uptrend phase that is still intact since 13 January 2025.

Before we jump straight into the technical analysis portion, let’s briefly highlight the main macro drivers that reinforced the recent softness seen in the EUR/USD.

Recent rise in Eurozone sovereign risk premium capped the euro's strength

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Fig. 1: 10-year yield spread of France sovereign bond/Germany Bund with EUR/USD as of 16 Oct 2025 (Source: TradingView)

Political uncertainties in France, the second-largest economy in the Eurozone, triggered higher sovereign risk premia in the Eurozone.

The newly appointed French Prime Minister, Sebastien Lecornu, resigned within hours of forming a cabinet, making it the shortest-lived government in modern French history. Also, the French government faces ongoing no-confidence threats and an inability to pass a credible budget.

An increase in sovereign risk premia in the Eurozone can be gauged by using the yield spread of the 10-year French sovereign bond over the 10-year Germany Bund. The yield spread has spiked from 0.80% to 0.86% during the period of 16 September 2025 to 7 October 2025, in turn, triggering a slide in the EUR/USD over the same period (see Fig. 1).

Interestingly, the 10-year yield spread between the French sovereign bond and the Germany Bund has started to compress to 0.77% as of 16 October 2025 at this time of writing, which suggests that sovereign risk premia in the Eurozone have been reduced as compared to two weeks ago, reinforced by the reappointment of the French Prime Minister Sebastien Lecornu proposed suspending a law to raise the retirement age in a bid to bring political stability to the country.

Let’s now focus on the medium-term technical outlook of the EUR/USD

Evolving within an “Ascending Triangle” range configuration since 1 July 2025

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Fig. 2: EUR/USD medium-term & major trends as of 16 Oct 2025 (Source: TradingView)

Since hitting its 1 July 2025 high of 1.1830, the price actions of the EUR/USD have traced out “similar swing highs” and “higher swing lows” (depicted by the four grey shaded boxes on the chart).

These observations represent a potential bullish consolidation configuration called “Ascending Triangle” that represents a pause in EUR/USD’s impulsive up move sequences within its ongoing medium-term uptrend phase in place since 13 January 2025 low of 1.0178 (see Fig. 2).

Also, the daily RSI momentum indicator of the EUR/USD has managed to stage a rebound after a retest of its key ascending support on 9 October 2025, which supports the ongoing medium-term uptrend phase of the EUR/USD.

We will now examine its latest short-term (1 to 3 days) trajectory and key technical levels to watch on the EUR/USD.

Preferred trend bias (1-3 days) – Minor “Double Bottom” bullish breakout

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Fig. 3: EUR/USD minor trend as of 16 Oct 2025 (Source: TradingView)

Bullish bias with key short-term pivotal support at 1.1590 for the EUR/USD. A clearance above 1.1690 sees the next intermediate resistance coming in at 1.1760 (see Fig. 3).

Key elements

• The price actions of the EUR/USD have staged a bullish breakout on Wednesday, 15 October 2025, from the neckline resistance of a minor “Double Bottom” (depicted in the two green boxes shown in Fig. 3), now turns into an intermediate pull-back support at 1.1625
• The 1.1690 intermediate resistance confluences closely with the intersection point of the 20-day and 50-day moving averages.
• The hourly RSI momentum indicator of the EUR/USD has reached its overbought region, but no bearish divergence condition has been flashed out. These observations suggest a minor pull-back in the EUR/USD rather than a bearish reversal scenario.

Alternative trend bias (1 to 3 days)

A break below the 1.1590 key short-term support invalidates the minor bullish breakout scenario on the EUR/USD for a retest on the 1.1530 key medium-term pivotal support.

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