1.1250 in focus: EUR/USD Price Forecast points to gains holding near this level, but bias remains bearish below 100-day average

• 1.1245 is the approximate level EUR/USD has strengthened to in early European trading on Thursday.
• Below the 100-day SMA, the pair’s outlook stays bearish, although a neutral RSI leaves scope for further consolidation.
• 1.1276 marks the first resistance, while support lies at 1.1185.

1.1245 is where EUR/USD is trading, broadly, with gains early in Thursday’s European session. France’s fiscal concerns could nevertheless cap further advances. Later on Thursday, European Central Bank (ECB) policymaker Fabio Panetta is due to speak.

For the first time in 24 years, French 10-year borrowing costs exceeded 5% on Wednesday. Unrest across France over the weekend, driven partly by public service cuts, has underscored the political difficulty of reining in budget deficits.

Spectra Markets' president Brent Donnelly described the impasse: "The euro cannot sell off—and it cannot rally," adding: "We are in a stalemate where the overhang of bad news just about perfectly offsets the market positioning,”

According to Reuters, a rate increase before the year's end is almost fully priced in, although the ECB is expected to keep its benchmark rate at 2.5% next week.

In the US, the CME FedWatch tool shows that traders assign only a low probability to a Federal Reserve (Fed) rate increase next week. December is the expected timing for the next rise.

EUR/USD stays rangebound despite gas surge and bond market nerves

Energy and bond market swings are no longer eliciting EUR/USD’s usual response, according to analysts at Societe Generale. They describe it as “curious that cycle highs in nat gas prices and bond jitters have not triggered another leg down in a way that would have occurred prior to October.” The analysts observe that “the correlations have broken down over the past two weeks or so,” and say this “would suggest that most of the bad news is priced in or investors are not committed to putting on new directional trades, playing the ranges instead.”

Dollar supported by investment surge and AI optimism; Warsh keeps policy options open

A 5.6 FXS Speechtracker score, against a historical average of 6.1, placed Fed Chair Warsh’s moderately constructive remarks slightly below the established baseline in forcefulness. His acknowledgement of being “over-scarred from the Global Financial Crisis” points to a risk-averse inclination. While highlighting a structural upswing in growth and investment, Warsh declined to commit in advance to October and December decisions, preserving considerable policy flexibility. His focus on AI’s effect on demand and the need to “crystalize” output, employment and inflation data indicates a cautious, data-dependent approach. That stance moderates immediate hawkish expectations for the Dollar.

At a still-elevated 127.51, the FXS Fed Sentiment Index registered a 0.00-point change. Despite the slightly softer FXS Speechtracker reading, the unchanged index confirms an overall policy message that remains firmly hawkish. Taken together, the high FXS Fed Sentiment Index and Warsh’s unwillingness to prejudge meetings suggest markets should retain a restrictive policy bias in pricing, without an additional near-term hawkish impetus for the Dollar.

Technical outlook: EUR/USD keeps its near-term bearish bias

Below both the 100-day Moving Average and, marginally, the 20-day Bollinger simple moving average, EUR/USD retains a bearish near-term bias on the daily chart despite modest stabilisation. At around 42, the Relative Strength Index (14) remains beneath the neutral 50 threshold. This points to fading downside momentum, not a reversal, with moving-average resistance overhead continuing to constrain the pair.

The October 6 high at 1.1276 provides the first upside hurdle, ahead of the upper Bollinger band at 1.1372. A stronger obstacle sits around 1.1455 at the 100-day Moving Average. EUR/USD would have to regain that level to alleviate the broader bearish pressure. 

The October 19 low of 1.1185 offers initial downside support. Next comes the lower Bollinger band at 1.1120, with the psychological 1.1000 level the key area to watch beyond that. 

(The technical analysis of this story was written with the help of an AI tool. Know more.)