In early October, EUR/USD broke below 1.0515 and dropped to a low of 1.0447 before rebounding. The rebound took out both the declining trendline resistance and the 55-day exponential moving average. The breach of these strong resistance levels suggests that the weakness in EUR/USD from July has stabilised. However, it is too early to expect a sustained recovery. The current price movements are likely part of a consolidation phase, and EUR/USD is likely to trade in a range between 1.0450 and 1.0730 for the next couple of months.

Looking ahead, as long as EUR/USD does not break clearly above 1.0730, there is still a chance, albeit not a high one, for EUR/USD to dip below 1.0400 before the risk of a more sustained and pronounced recovery is likely. At this stage, EUR/USD does not appear to have enough momentum to break clearly below 1.0315.