The EUR/USD pair has been unable to sustain its renewed intraday gains above the psychological 1.1200 level. Nevertheless, the current price remains above the October low recorded last Wednesday. Although the fundamental backdrop suggests that the path of least resistance for the pair is to the downside.

Market participants are focused on the state of France's public finances. The government is struggling to secure approval for a budget aimed at reducing the deficit ahead of upcoming elections. This has widened the yield spread between 10-year French and German government bonds to its highest level since the European debt crisis of 2011. This situation, combined with widespread civil unrest across France, is destabilizing European financial markets and putting downward pressure on the single European currency. The renewed demand for the US dollar has also become an additional obstacle to EUR/USD gains.

Measured comments from Federal Reserve officials regarding the future direction of monetary policy have reduced expectations of a tightening in October. At the same time, US inflation data released last week came in above consensus forecasts, supporting the possibility of a key interest rate hike by the end of the year.

Furthermore, persistent geopolitical risks associated with escalating tensions in the Middle East and the US-Iran confrontation near the Strait of Hormuz are supporting the US dollar, which is traditionally viewed as a safe-haven asset. As a result, the dollar has continued the upward move that began on Friday following a brief decline to a two-week low.

In the short term, EUR/USD retains a bearish bias, following Friday's failed attempt to break above the horizontal resistance level of 1.1270–1.1275, which coincides with the 20-day simple moving average (SMA). The nearest support is located at the October low near 1.1150. A decisive break below this level would open the way for a deeper pullback. The 20-day SMA remains a key resistance level. As long as the oscillators remain in negative territory, the bears retain the advantage.