EUR/USD Price Forecast: Bearish bias holds below 100-day SMA as pair eases to near 1.1150

• Selling pressure takes EUR/USD towards 1.1165 in early European trading on Tuesday.
• Below the 100-day SMA, the pair’s outlook remains bearish, reinforced by negative RSI momentum.
• At 1.1140 lies immediate support, while 1.1215 marks the first resistance to monitor.

Renewed financial stress across the Eurozone, driven by concerns over France’s finances, weighs on the Euro (EUR) against the US Dollar (USD). EUR/USD is trading lower near 1.1165 in Tuesday’s early European session as the Euro extends its losses. Attention now turns to the interest rate decisions from the Federal Reserve (Fed) and European Central Bank (ECB) later this week.

An unchanged benchmark interest rate is expected from the Fed on Wednesday. According to the CME FedWatch Tool, traders assign a probability of nearly 89.5% to policymakers retaining the current target range of 3.75% to 4.0%.

Kit Juckes, chief global FX strategist at Societe Generale, said, "The fundamental issue with the euro hasn't changed and spreads have tightened," adding, "Euro is still vulnerable at this point because the growth outlook isn't good and energy prices are still elevated,”

A Reuters poll indicates that the ECB will likely retain its 2.50% deposit rate at Thursday’s October policy meeting. With inflation running at nearly twice its 2% target, however, the central bank is expected to increase the rate by 25 basis points (bps) in December.

What is supporting USD as the yield curve flattens and Brent eases from recent highs?

A slightly firmer Dollar accompanies a more cautious mood in rates and commodities, according to analysts at Commerzbank. They observe that "the US Treasury yield curve flattened slightly, with the short-end higher [while] the long-end edged lower." On energy markets, they note that "Brent crude oil prices pulled back from a near six-month high as diplomatic activity around the US-Iran conflict offered some relief to energy markets," adding that "the USD was slightly firmer."

How does Warsh balance an investment surge and AI risks without committing to policy?

A reading of 5.6/10 on the FXS Speechtracker places Fed Chair Warsh’s speech modestly below the historical average of 6.1/10. Although the messaging is broadly unchanged, the score indicates a slightly less impactful tone against the established baseline. Warsh acknowledges being “over-scarred” by the global financial crisis, reflecting a cautious bias, while pointing to structural growth and a surge in investment supported by “good policies,” and firmly declining to pre-judge forthcoming FOMC decisions. By describing AI as a near-term driver of demand and a means of improving confidence in data, while also addressing negative tail risks, Warsh balances optimism about innovation with vigilance over financial stability.

Despite the slightly softer FXS Speechtracker reading, the broader policy tone remains firmly hawkish: the FXS Fed Sentiment Index recorded a 0.00-point change to stand unchanged at 127.51. Its steady, elevated reading suggests that markets interpret Warsh’s caution, focus on price stability and emphasis on strong investment as favouring unchanged or tighter policy, rather than a turn towards a more dovish Dollar stance.

Technical Analysis: Can EUR/USD shake off its near-term bearish bias?

Trading below both the 100-day Simple Moving Average (SMA) and the Bollinger Bands’ middle line, EUR/USD retains a bearish near-term bias on the daily chart. Prices are drifting through the lower half of the volatility envelope and sit only slightly above its lower band. Meanwhile, the Relative Strength Index (14), at 33.6, remains just above oversold territory, suggesting that selling pressure continues even as the decline becomes stretched.

Immediate support comes from the lower Bollinger band at 1.1140. Sustained selling beneath it would bring the psychological 1.1100 mark into view, ahead of 1.0951, the low recorded on 12 May 2025. 

The middle Bollinger band, around 1.1215, provides the first upside hurdle, with the next resistance at the upper Bollinger  band near 1.1295. If prices break decisively above that level, the way could open towards the 100-day SMA at 1.1445. This more distant resistance reinforces the broader bearish structure. 

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