EUR/USD Price Forecast: Eases below 1.1150 as bearish bias persists beneath key moving averages

• Near 1.1120, EUR/USD is trading lower in early European dealings on Wednesday.
• Below the 100-day SMA, the pair retains a bearish bias, although oversold conditions leave scope for short-lived recoveries.
• At 1.1100 lies the initial downside objective, while 1.1205 provides the nearest resistance.

Around 1.1120 in Wednesday’s early European session, EUR/USD remains under pressure. Ahead of Wednesday’s Federal Reserve (Fed) interest rate announcement, a more cautious mood could emerge in markets later in the day. Attention will then shift to the European Central Bank (ECB) policy meeting on Thursday.

A decision to leave benchmark rates at 3.75%-4.00% is expected when the Fed announces its policy on Wednesday. According to the CME FedWatch tool, Fed funds futures imply a 92.8% probability that the Federal Open Market Committee (FOMC) will leave its policy interest rate unchanged. For December, the probability of a US rate increase is 84.4%.

Chris Weston, head of research at Pepperstone Group in Melbourne, said: "The Fed doesn't need to hike today to move markets," adding: "It simply needs to change the perceived probability of hiking in December."

Following September’s 25 bps increase, the ECB is likely to keep its key interest rates on hold at Thursday’s forthcoming meeting. In the near term, however, the Euro’s gains might be constrained by elevated energy costs, swings in French government bonds and concerns over France’s fiscal position.

EUR Comes Under Pressure as the Dollar Strengthens and Wall Street Edges Up

A mixed, though broadly constructive, picture of US markets is described by Commerzbank analysts, who observe that “the DJIA held steady, while the S&P500 and the Nasdaq Composite Index rose 0.6% and 1.2% respectively.” Turning to currencies, the analysts point to fresh support for the greenback, noting that “the Dollar Index rose 0.4% to 102.37,” and cite the resulting pressure on the Euro: “EUR-USD fell 50 pips to 1.1120.”

Dollar Bulls Stay Alert as Warsh Balances Crisis Caution With Optimism on Investment and AI

At 5.6 against a historical baseline of 6.1, Fed Chair Warsh’s comments register slightly below the established benchmark on the FXS Speechtracker. The score points to a mildly less forceful tone, although the substance of the messaging is largely unchanged. By acknowledging that he is “over-scarred” by the Global Financial Crisis, Warsh signals an underlying inclination towards caution on financial stability. At the same time, he points to a structural surge in growth and investment while declining to commit in advance to decisions at the October and December meetings. His focus on AI as both a short-term source of demand and a future aid to data-dependent policymaking suggests a willingness to consider productivity-driven upside risks, alongside recognised uncertainty over employment.

Following the speech, the FXS Fed Sentiment Index remained at 127.51. Despite the 0.00-point change, that level is firmly hawkish. The latest remarks therefore did not add to the hawkish signal, but the broader policy setting continues to favour the Dollar, given the elevated Fed hawkishness reflected in both the FXS Fed Sentiment Index and the FXS Speechtracker.

Technical Analysis: EUR/USD Remains Bearish Despite Oversold Conditions

With spot beneath the 20-day Bollinger simple moving average and substantially below the 100-day moving average, the daily EUR/USD chart continues to show a pronounced bearish trend. Both averages reinforce the downward bias. Trading below the lower Bollinger band also points to sustained selling pressure. Meanwhile, a Relative Strength Index (14) reading of around 30 indicates oversold conditions, which could temper the decline without yet signalling a reversal.

Initial support for the pair is provided by the psychological 1.1100 mark. Sustained selling beneath that threshold would bring the 12 May 2025 low of 1.0951 into view. As long as EUR/USD stays firmly below this longer-term barrier, the wider bearish bias is likely to endure.

For any recovery, the first resistance comes from the 20-day Bollinger midline at around 1.1205, followed by the upper Bollinger band near 1.1280. Clearing the latter level decisively could open a path towards the 100-day moving average at 1.1440. 

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