EUR/USD Price Forecast: Bearish technical outlook holds below 100-day SMA as pair retreats below 1.1250

• At around 1.1225, EUR/USD trades lower in early European dealing on Wednesday.
• A French official plans to deploy the military to help keep order during protests scheduled for the coming weekend.
• Below the 100-day SMA, the pair retains a bearish bias, reinforced by negative RSI momentum.
• Support is first seen at 1.1185, while 1.1252 marks the nearest resistance to monitor.

Near 1.1225 in Wednesday’s early European session, EUR/USD remains under pressure as turmoil in France and concerns over its public finances weigh on the Euro (EUR) against the US Dollar (USD). Later in the day, traders will turn to speeches by European Central Bank (ECB) policymakers, including President Christine Lagarde, Philip Lane, Joachim Nagel and Piero Cipollone.

With further protests scheduled for Saturday, France will deploy troops to support police as part of a major security operation, Reuters reported. The government has acknowledged shortcomings in its handling of the previous weekend’s violence. French Prime Minister Sébastien Lecornu also announced fresh curfews “where the situation requires it.”

Handelsbanken FX strategist Tommy von Brömsen 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 advance indication of his views 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,”

EUR/USD remains range-bound as UOB maintains consolidation view

A sideways near-term outlook for EUR/USD remains the view of UOB Group strategists. In their latest update last Friday, with spot at 1.1215, they said 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.” They continue to “hold the same view for now,” favouring consolidation over a directional forecast at this point.

Warsh highlights investment surge and AI while withholding policy commitments

At 5.6/10, the FXS Speechtracker score for Fed Chair Warsh’s remarks came in slightly below its historical average of 6.1/10, reflecting a balanced message that was moderately constructive yet cautious. His acknowledgement of being "over-scarred from the global financial crisis" points to an enduring emphasis on risk management and financial stability. At the same time, Warsh drew attention to structural growth and an investment surge supported by "good policies", without prejudging forthcoming FOMC decisions. He presented AI both as a near-term source of demand and as a means of improving confidence in data. Together with plans for an AI field hearing and new Fed task forces, this suggests a forward-looking approach that could ultimately alter expectations for the Dollar should productivity and inflation dynamics change.

A move of 0.00 points left the FXS Fed Sentiment Index unchanged at a still-elevated 127.51. Despite the lack of commitment on future meetings, the speech therefore left perceptions of the policy stance firmly in hawkish territory. Taken together, the steady FXS Fed Sentiment Index and slightly weaker FXS Speechtracker score indicate that markets perceive no 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 vigilant, data-dependent approach rather than a decisive dovish turn.

Technical Analysis: EUR/USD remains bearish beneath key resistance

With spot trading below both the 20-day Bollinger simple moving average and the 100-day simple moving average (SMA), the daily chart continues to indicate a bearish near-term outlook for EUR/USD. Its position beneath the upper Bollinger band also suggests that the broader downward structure remains intact. At 39.6, the Relative Strength Index (14) is in bearish territory without reaching oversold levels, pointing to ongoing selling pressure rather than exhaustion.

The low of 19 October at 1.1185 provides the pair’s first support, ahead of the lower Bollinger band at 1.1115. A decisive move beneath that boundary would likely bring the psychological 1.1000 level into view, followed by the 12 May 2025 low of 1.0951. 

For a recovery, the first resistance lies around 1.1252 at the 20-day Bollinger SMA, with the upper Bollinger band near 1.1390 next in line. Sustained buying beyond that level could clear the way towards the 100-day SMA at 1.1460. 

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