EUR/USD Price Forecast: Bears retain control below 100-day SMA as pair slips below 1.1250

• Selling pressure takes EUR/USD towards 1.1225 as European trading gets under way on Wednesday.
• A French official plans to deploy the military to help preserve order during protests scheduled for the coming weekend.
• Below the 100-day SMA, the cross retains a bearish outlook, reinforced by negative RSI momentum.
• Support first comes into focus at 1.1185, while 1.1252 marks the nearest resistance to monitor.

Pressure on the Euro (EUR) against the US Dollar (USD) persists amid turmoil in France and fiscal worries, leaving EUR/USD trading lower near 1.1225 early in Wednesday’s European session. Attention now turns to remarks due later in the day from European Central Bank (ECB) policymakers, including President Christine Lagarde, Philip Lane, Joachim Nagel and Piero Cipollone.

With further protests scheduled for Saturday, France plans to deploy troops alongside police as part of a major security operation, Reuters reported. The move follows the government’s acknowledgement of shortcomings in its handling of the previous weekend’s violence. Fresh curfews would also be imposed “where the situation requires it.” according to French Prime Minister Sébastien Lecornu.

Tommy von Brömsen, FX strategist at Handelsbanken, said: "The worries in France are not going away anytime soon," adding: "The bearish view on France will stay for a while longer, and there's much more euro weakness to be priced in,”

Whether further interest rate increases would be necessary, and when they might come, remained unclear after the Federal Reserve (Fed) Chair offered no guidance on either question last week.

Speaking at the IMF annual meeting in Bangkok, Warsh said: "I don't prejudge meetings," and added: "I don't believe in saying now what I might do at the meetings that we have in the balance of this year,”

Will EUR/USD Remain Range-Bound as UOB Sees Euro Consolidation?

A near-term sideways phase remains the base case for EUR/USD, according to strategists at UOB Group. They referred to their update last Friday, when spot stood at 1.1215, reiterating that the Euro “has likely entered a range-trading phase, and for the time being, it is likely to trade between 1.1160 and 1.1280.” By continuing to “hold the same view for now,” UOB favours consolidation rather than taking a directional stance at this point.

What Do Warsh’s Investment and AI Remarks Signal Without a Policy Commitment?

A balanced tone emerged from Fed Chair Warsh’s cautiously constructive remarks. At 5.6/10, the FXS Speechtracker score was slightly below its historical average of 6.1/10. His acknowledgement of being "over-scarred from the global financial crisis" highlights an enduring emphasis on risk management and financial stability. At the same time, Warsh pointed to structural growth and an investment surge supported by "good policies", while declining to prejudge forthcoming FOMC decisions. He presented AI both as a near-term source of demand and as a means of improving confidence in data, alongside plans for an AI field hearing and new Fed task forces. This forward-looking approach could ultimately alter expectations for the Dollar if productivity and inflation dynamics change.

Despite the lack of a commitment on future meetings, perceptions of the Fed’s policy stance remained firmly hawkish after the speech. The FXS Fed Sentiment Index recorded a 0.00-point move, holding at an elevated 127.51. Read alongside the slightly weaker FXS Speechtracker score, the unchanged index suggests markets do not anticipate an immediate change in the Fed’s reaction function. Warsh’s caution, shaped by the financial crisis, and his attention to financial stability risks support expectations of a watchful, data-dependent approach rather than a decisive dovish turn.

Technical Analysis: Can EUR/USD Shake Off Its Bearish Bias Below Key Resistance?

A bearish near-term outlook remains evident on the EUR/USD daily chart, with spot unable to move above either the 20-day Bollinger simple moving average or the 100-day simple moving average (SMA). Trading below the upper Bollinger band also suggests that the pair remains confined within a broader downward structure. At 39.6, the Relative Strength Index (14) is in bearish territory without reaching oversold levels, indicating continued selling pressure rather than exhaustion.

The first downside support for the cross lies at 1.1185, the low recorded on 19 October. Beyond that, the lower Bollinger band at 1.1115 becomes relevant. A decisive breach of this level would likely expose the psychological 1.1000 mark, followed by 1.0951, the low of 12 May 2025. 

For a recovery, the first hurdle is the 20-day Bollinger SMA around 1.1252, followed by the upper Bollinger band near 1.1390. Sustained buying above the latter could bring the 100-day SMA at 1.1460 into view. 

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