EUR/USD – Bears in Control but Demand Zone Could Spark a Rebound

[johnblockbuster]

EUR/USD – Weekly Outlook (1–7 November 2025)

Bears remain in control, but a key demand zone is now in play.
The euro continues to trade under pressure as macro divergences between the U.S. and Eurozone persist.
In the U.S., the latest data confirmed a clear cooldown in growth and inflation, with Core PCE slowing to 2.6% YoY and GDP Q3 printing 2.2% vs. 3.0% expected. This fueled market expectations for a Fed rate cut in Q1 2026, yet Chair Powell reiterated that “progress on inflation remains incomplete,” keeping a neutral–hawkish tone. The U.S. dollar therefore preserved its defensive bid, supported by ongoing safe-haven demand amid geopolitical tension and weaker European data.
Across the Eurozone, inflation continues to decelerate (headline 2.5%, core 2.8%), while PMIs remain below 50, indicating a stagnant industrial sector. Market participants now expect the ECB to lean more dovish into early 2026, potentially preparing the ground for a rate cut once disinflation stabilizes. This narrative has weighed on the euro, pushing EUR/USD back below 1.16.

COT (Commitment of Traders)
COT data remain frozen due to the CFTC shutdown, with the last update dated September 23.
At that time, non-commercials held a strong net long on EUR (+114K), reflecting broad bearishness on the USD. However, the latest price action clearly suggests a partial unwinding of long exposure, consistent with the recent downside retracement.
️ These figures are now outdated and must be interpreted with caution — institutional flows may have shifted significantly since late September.

Retail Sentiment
59% long / 41% short → contrarian bearish bias.
Retail traders remain predominantly long, implying a higher probability of continued downside in the short term, especially while macro data favor the dollar.

Seasonality
Seasonal statistics for November are mildly positive over 10–20Y composites, but recent 5-year data suggest a sluggish start to the month, often followed by a technical rebound in the second half.
Seasonal conclusion: short-term weakness likely persists into mid-November, with recovery potential toward month-end once markets price in softer U.S. CPI or dovish Fed expectations.

Technical Outlook
EUR/USD continues to move within a descending channel since late August.
After a clean rejection from the 1.1700–1.1750 supply zone, the pair broke recent lows and is now consolidating within the 1.1530–1.1550 demand area, aligned with the summer support base.

Key technical levels:
Resistance: 1.1650–1.1700
Immediate support: 1.1530–1.1500
Next demand zone: 1.1380–1.1420
RSI: below 50, yet showing early signs of bullish divergence, hinting at a potential rebound if 1.15 holds.

Primary Scenario:
Price may extend the corrective leg toward 1.1450–1.1420, where a structural swing low could form. From there, any USD weakness following U.S. CPI data could fuel a technical rebound targeting 1.1650–1.1700.

️ Invalidation: Daily close above 1.1730, which would break the descending structure and shift the bias neutral-to-bullish.

Summary
Macro: Euro pressured by softer inflation and weak PMI; USD supported by cautious Fed and geopolitical flows.
Sentiment: Retail still long — contrarian signal for more downside.
Technical: Channel intact; demand zone at 1.1530–1.1500 under test.
Outlook: Expect another leg lower before possible late-month rebound.

[EmTeam]

Good catch — RSI divergence hinting at a potential short-term bounce

[jacson4]

Short-term bears, but a quick bounce wouldn’t surprise me.