EUR/USD Price Forecast: Gains ground above 1.1150, while retaining bearish bias below 100-day SMA

During the early European trading hours on Monday, the EUR/USD pair traded in positive territory around 1.1160. This gain was supported by a hawkish stance from the European Central Bank (ECB), with President Christine Lagarde stating that the central bank is monitoring indicators to determine if an interest rate hike is warranted next month.

Meanwhile, the US economy added 165,000 jobs in October, beating estimates, while the unemployment rate fell to 4.1%. These positive labor market indicators have reinforced expectations that the Federal Reserve (Fed) will likely raise interest rates in December. Analysts at ING have characterized the Euro's performance as "rather unimpressive," noting that the European buy-side is running low on hedge ratios for its US investments, and global investors are increasingly holding cash instead.

Looking ahead, ING anticipates EUR/USD to consolidate near 1.12, barring a soft US jobs report. The current market pricing of 18 basis points (bp) of ECB hikes in December suggests a hawkish bias for the Euro, even as Lagarde acknowledges the difficulty of disentangling supply and demand shocks. Technical analysis indicates a bearish near-term bias for EUR/USD, with the pair trading below the 20-day and 100-day simple moving averages, and hovering beneath the upper Bollinger band.

The next resistance level is at the 20-day Bollinger SMA around 1.1190, with the 100-day SMA at 1.1412 acting as a further hurdle. Conversely, the immediate support level is at the lower limit of the Bollinger band, around 1.1125, with a potential breakdown leading to the 1.1100 psychological level and the May 12, 2025 low of 1.0951.