Below 1.1150: EUR/USD Price Forecast Stays Bearish as Pair Softens Beneath Key Moving Averages

• 1.1120 is the level EUR/USD has slipped towards in early European trading on Wednesday.
• Below the 100-day SMA, the pair retains its bearish outlook, although oversold conditions leave scope for short-lived recoveries.
• 1.1100 is the initial downside objective, while 1.1205 marks the nearest resistance.

1.1120 is the level EUR/USD is trading near as it softens early in Wednesday’s European session. Caution could build later in the day before Wednesday’s Federal Reserve (Fed) interest rate announcement. Attention will then shift to Thursday’s European Central Bank (ECB) policy meeting.

A benchmark rate range of 3.75%-4.00% is expected to remain in place when the Fed announces its decision 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."

For the Euro, Thursday’s ECB meeting is likely to deliver unchanged key interest rates after September’s 25 bps increase. Near-term gains in the single currency could nevertheless be constrained by elevated energy costs, French government bond volatility and concerns over France’s fiscal position.

0.4% Dollar Index gain pressures EUR as Wall Street firms

US markets show a mixed but broadly constructive tone, according to Commerzbank analysts. They observe that “the DJIA held steady, while the S&P500 and the Nasdaq Composite Index rose 0.6% and 1.2% respectively.” Turning to FX, the analysts point to fresh backing for the greenback: “the Dollar Index rose 0.4% to 102.37,” leaving the single currency under pressure as “EUR-USD fell 50 pips to 1.1120.”

5.6 Speechtracker score: Warsh balances crisis caution with investment and AI optimism, keeping Dollar bulls watchful

At 5.6 against a historical baseline of 6.1, Fed Chair Warsh’s remarks register slightly below the established benchmark on the FXS Speechtracker. The reading signals a modestly less impactful tone, although the broader message is largely unchanged. Warsh’s acknowledgement of being “over-scarred” by the Global Financial Crisis points to an underlying cautious stance on financial stability. At the same time, he stresses a structural surge in growth and investment without committing in advance to decisions at the October and December meetings. His focus on AI as an immediate driver of demand and a future aid to data-dependent policymaking indicates openness to productivity-driven upside risks, while recognising uncertainty over employment.

The speech left the FXS Fed Sentiment Index at 127.51, with a 0.00-point change and a firmly hawkish reading. Although the latest remarks did not add to that hawkish stance, the broader policy environment continues to favour the Dollar. This reflects the elevated Fed hawkishness recorded by both the FXS Fed Sentiment Index and the FXS Speechtracker.

Technical Analysis: 100-day SMA caps EUR/USD as bearish bias persists despite oversold conditions

Below both the 20-day Bollinger simple moving average and the more distant 100-day moving average, EUR/USD remains in a pronounced bearish phase on the daily chart. Both averages now reinforce the negative bias. Spot also sits beneath the lower Bollinger band, signalling sustained selling pressure. Meanwhile, the Relative Strength Index (14) is around 30, indicating oversold conditions that may temper the decline without yet reversing it.

Initial support for the major pair lies at the psychological 1.1100 threshold. Further selling beneath it would bring the 12 May 2025 low of 1.0951 into view. With EUR/USD still firmly below the longer-term barrier, the broader bearish outlook is likely to endure.

The first upside resistance is the 20-day Bollinger midline at around 1.1205, followed by the upper Bollinger band near 1.1280. Clearing the latter 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.)