1.1200 in Focus: EUR/USD Price Forecast Holds Above This Level but Stays Bearish Below 100-day SMA

• 1.1220 is in focus as EUR/USD strengthens in early Asian trading on Monday.
• Below the 100-day moving average, the pair’s outlook remains negative as RSI momentum stays bearish.
• 1.1270 marks the first resistance level, while initial support stands at 1.1185.

1.1220 remains the level around which EUR/USD trades in positive territory early in Monday’s European session. An extended rally in US Treasury bonds is pushing yields lower, weakening the US Dollar (USD) against the Euro (EUR). Attention now turns to interest rate decisions from the US Federal Reserve (Fed) and the European Central Bank (ECB) later this week.

In the previous session, the 10-year US Treasury yield declined to 4.97%. The 30-year bond yield stood at 5.299%, close to one-month lows. Ray Attrill, head of FX strategy at National Australia Bank, said: "For the time being, it seems to point to the US bond market being in the driving seat for broader dollar performance,"

Just days ahead of the midterm elections, many analysts expect the Fed to leave interest rates unchanged. According to the CME FedWatch tool, markets assign a nearly 90.6% chance to rates remaining on hold at Wednesday’s October meeting. The probability of a US central bank rate increase in December stands at 79.4%.

For the shared currency, however, near-term pressure could come from concerns over mounting unrest in France and the country’s deteriorating budget position.

Thursday brings the ECB’s interest rate decision, with rates expected to remain unchanged. Market participants will examine any signals on the rate outlook, following ECB President Christine Lagarde’s late-September statement that a moderate policy response to inflation was appropriate.

5.6/10 Speech Score: Warsh Highlights Investment Surge and AI, Leaves Fed Path Open

A score of 5.6/10 on the FXS Speechtracker places Fed Chair Warsh’s speech modestly below the historical average of 6.1/10. The reading points to caution despite positive comments on structural growth and surging investment. His reference to being “over-scarred from the global financial crisis” highlights a persistent emphasis on risk management and financial stability. At the same time, Warsh stresses policy-driven investment strength without prejudging the October and December meetings. His focus on AI’s demand-side effects, confidence in data and the November field hearing suggests a forward-looking approach. Without explicit policy guidance, however, the overall message remains balanced rather than clearly hawkish.

At 127.51, the FXS Fed Sentiment Index recorded a 0.00-point change, signalling no material shift in perceived policy bias following the speech. Its position firmly above 100 still places the Fed in hawkish territory. The unchanged reading indicates that Warsh’s remarks largely upheld the policy narrative already reflected in the FXS Speechtracker.

Technical Outlook: 100-day SMA caps EUR/USD as bearish bias persists

On the daily chart, trading below both the 100-day simple moving average (SMA) and the upper Bollinger band leaves EUR/USD with a bearish near-term bias. The pair is testing the area near the Bollinger middle band, which lies just above the current price and provides immediate resistance. Meanwhile, a 14-day Relative Strength Index reading around 40 points to subdued, still-bearish momentum, rather than an outright oversold market.

Recovery attempts face initial resistance at 1.1270, the high recorded on 16 October, before the upper Bollinger band at 1.1315. Sustained trading above that level could clear a route to the 100-day SMA at 1.1450. A break above the SMA would be required to alleviate the broader downward pressure.

Initial support lies at the 23 October low of 1.1185, ahead of the lower Bollinger band around 1.1138. A decisive break below this floor would expose the psychological 1.1100 level. 

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