EUR/USD Price Forecast: Softens to near 1.1150, with bearish bias intact below 100-day SMA

The EUR/USD currency pair is trading near 1.1150, exhibiting a bearish sentiment as it remains below the 100-day Simple Moving Average. Concerns surrounding France's fiscal situation have further weakened the Euro (EUR) in relation to the US Dollar (USD). Forex traders are keeping a close eye on the interest rate decisions from the Federal Reserve (Fed) and the European Central Bank (ECB) in the coming days.

The Federal Reserve is expected to maintain the benchmark interest rate unchanged at their meeting on Wednesday. Current market sentiment predicts an 89.5% probability of the Fed holding interest rates steady within the 3.75% to 4.0% range. Kit Juckes, a chief global FX strategist at Societe Generale, notes that the Euro's challenges persist due to its poor growth outlook and elevated energy prices.

The European Central Bank (ECB) is expected to keep its deposit rate at 2.50% during its October policy meeting and may raise it by 25 basis points in December as inflation remains nearly double the 2% target, according to a Reuters survey. The recent flattening of the US Treasury yield curve and the decline in Brent crude oil prices, driven by diplomatic efforts surrounding the US-Iran conflict, have contributed to a slightly less aggressive tone from the Federal Reserve.

Fed Chair Jerome Powell's speech received a score of 5.6/10 on the FXS Speechtracker, slightly below the historical average. Despite this, the ECB's Governor Christine Lagarde maintains a cautious stance, emphasizing structural growth and investment driven by "good policies" while rejecting any premature predictions about upcoming FOMC decisions.

Powell's focus on AI as a near-term demand-side force and a tool to enhance data confidence, combined with his awareness of financial stability risks, indicates a balanced approach between optimism and caution. The FXS Fed Sentiment Index remained unchanged at 127.51, reinforcing the overall hawkish tone in the markets. Technical analysis indicates that EUR/USD continues to show a bearish near-term bias as the pair stays beneath the 100-day SMA and the Bollinger Bands' middle line.

The lower Bollinger Band at 1.1140 provides immediate support, while a breach below this level could expose the psychologically significant 1.1100 level and the May 2025 low of 1.0951. Conversely, a move above the Bollinger middle band around 1.1215 may pave the way to the 100-day SMA at 1.1445, marking the upper boundary of the bearish structure.