1.1150 area: EUR/USD eases as price forecast remains bearish below 100-day SMA

• 1.1165 is the approximate level for EUR/USD as it slips in early European trading on Tuesday.
• Below the 100-day SMA, the pair’s outlook remains bearish, reinforced by negative RSI momentum.
• 1.1140 marks immediate support, while 1.1215 is the first resistance level in focus.

1.1165 is the approximate level for EUR/USD, which is trading lower. In Tuesday’s early European session, the Euro (EUR) is extending its losses against the US Dollar (USD) as concerns over France’s finances rekindle financial stress across the Eurozone. This week’s interest rate decisions from the Federal Reserve (Fed) and European Central Bank (ECB) will be closely watched by traders.

Wednesday’s Fed decision is expected to leave the benchmark interest rate unchanged. 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 is likely to retain its 2.50% deposit rate at Thursday’s October policy meeting. With inflation running at nearly twice its 2% target, the central bank is then expected to increase the rate by 25 basis points (bps) in December.

USD edges higher as yield curve flattens and Brent eases

A more cautious mood across interest rate and commodity markets is evident, according to analysts at Commerzbank. They note that "the US Treasury yield curve flattened slightly, with the short-end higher [while] the long-end edged lower." On energy, they observe 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."

Warsh highlights investment growth and AI risks, leaves policy options open

At 5.6/10, Fed Chair Warsh’s FXS Speechtracker score sits modestly below the historical average of 6.1/10. Despite broadly consistent messaging, the speech carries a slightly less impactful tone than the established baseline. Warsh’s admission of being “over-scarred” by the global financial crisis signals caution. At the same time, Warsh points to structural growth and a surge in investment supported by “good policies,” while firmly declining to prejudge forthcoming FOMC decisions. By describing AI as both a near-term driver of demand and a means of improving confidence in data, while also addressing downside tail risks, Warsh balances optimism about innovation with vigilance over financial stability.

A 0.00-point change left the FXS Fed Sentiment Index at 127.51. The overall policy message therefore remains firmly hawkish, notwithstanding the slightly softer FXS Speechtracker reading. Its unchanged, elevated level suggests markets interpret Warsh’s caution, focus on price stability and emphasis on strong investment as favouring unchanged or tighter policy, rather than a shift towards a more dovish stance on the Dollar.

Technical Analysis: EUR/USD stays bearish near term

Trading below both the 100-day Simple Moving Average (SMA) and the middle Bollinger Band keeps the near-term daily-chart bias bearish for EUR/USD. The pair is drifting lower within the bottom half of the volatility envelope, only marginally above its lower boundary. Meanwhile, the Relative Strength Index (14), at 33.6, sits just above oversold territory. This suggests selling pressure remains in place but is becoming stretched.

Immediate support comes from the lower Bollinger Band at 1.1140. Sustained selling beneath that level would bring the psychological 1.1100 threshold into view, ahead of the 12 May 2025 low at 1.0951. 

The middle Bollinger Band, around 1.1215, provides the first upside barrier, with the upper Bollinger  Band near 1.1295 next in line. A clear break above the latter could open the way towards the 100-day SMA at 1.1445. That 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.)