EUR/USD Price Forecast: Weakens below 1.1250, bearish tone prevails below 100-day SMA

On Monday, the EUR/USD pair traded at 1.1230, sliding below the 100-day Simple Moving Average (SMA). Fiscal risks in France and political instability in Europe contributed to the downward pressure on the Euro against the US Dollar. The European Central Bank (ECB) Executive Board member Frank Elderson is scheduled to speak later in the day.

Demonstrations across Europe, particularly in France, Belgium, Italy, and Portugal, could weigh on the shared currency. Although fading expectations of a Federal Reserve rate hike may cap the downside, the Euro's sensitivity to bond markets remains uneven. Scotiabank estimates a fair value of EUR/USD at 1.1285, while the technical outlook remains bullish due to a bounce from long-term retracement support and gains through resistance at 1.1240/50.

Fed Chair Kevin Warsh's speech was moderately constructive but cautious, signaling slightly softer conviction than usual. EUR/USD is currently in a bearish near-term trend, remaining below the 100-day SMA and Bollinger Bands' middle line. The next support level is at 1.1151, with further support near 1.1105. A breach below 1.1105 could expose the May 2025 low of 1.1050.