EUR/USD Analysis: Euro Pressure Persists Ahead of US Election Results

EUR/USD remains under persistent downside pressure despite a minor technical recovery late last week following a liquidity sweep below the recent swing low. While market structure allows for a potential corrective pullback toward overhead resistance, dominant bearish momentum continues to control short-term price action.

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From a technical perspective, the pair's immediate upside potential is constrained near the imbalance 24 resistance zone, where new sell signals may form if bearish momentum resumes. A meaningful bullish recovery would require buyers to invalidate this imbalance zone and build structural higher highs. On the downside, key liquidity targets remain focused near the 1.1114 swing low and the June low of 1.1066.

Fundamentally, the US dollar's multi-month appreciation has been sustained by Federal Reserve monetary policy expectations, despite recent FOMC decisions reflecting a neutral stance with only two members voting for further tightening. Meanwhile, economic performance in the Eurozone remains relatively stable, with third-quarter growth exceeding forecasts and the European Central Bank maintaining policy stability ahead of its December meeting.

Political developments are also steering sentiment as market participants monitor the ongoing US congressional elections. Despite potential policy shifts, traders continue to interpret incoming political news in favor of the US dollar, limiting near-term upside potential for the European single currency.

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Key Economic Drivers and Outlook

The upcoming economic calendar presents several key catalysts, including German and Eurozone Services PMIs, Eurozone Consumer Price Index (CPI) data, US ADP Employment Change, and the US ISM Services PMI. Combined with incoming election results, these high-impact events are likely to generate heightened market volatility.

Overall, while long-term fundamental factors do not entirely support an isolated US dollar rally, EUR/USD buyers have yet to confirm a structural reversal. Until clear bullish patterns emerge above key technical zones, pre-emptive buying carries elevated risk, with the near-term outlook remaining neutral-to-bearish.

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