EUR/USD Price Forecast: Softens to near 1.1200, sub-100-day SMA keep outlook bearish
The EUR/USD pair trades in negative territory around 1.1210 during the early European trading hours on Friday. Worries about France's ability to tackle its huge debt burden have hurt French government bonds and exert some selling pressure on the Euro (EUR) against the US Dollar (USD).
The EUR/USD currency pair traded near 1.1210 during early European trading hours on Friday, pressured by concerns over France's ability to address its significant debt burden. French government bonds fell as yields rose, and the spread over German Bunds widened to its largest gap since the eurozone debt crisis. French officials pledged a larger security operation for upcoming protests, while the European Central Bank (ECB) is anticipated to maintain its benchmark rate at 2.5% in the coming week.
Despite potential tightening, analysts from Rabobank believe the next rate hike may not occur this month, with the ECB holding policy unchanged. The persistent inflation risks and financial conditions amplify the need for rate hikes, with the bank expecting a final step in December. For now, there is no urgency to accelerate the pace of hikes.
The EUR/USD pair is trading below the 100-day simple moving average and the Bollinger middle band, indicating a bearish near-term outlook. The initial resistance level is at the Bollinger middle band around 1.1235, with a stronger cap at the upper Bollinger band around 1.13445. A break below the October 19 low of 1.1185 could open the door to the May 12, 2025 low of 1.0951.
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