EUR/USD Price Forecast: Strengthens to near 1.1500, while bearish bias persists below 100-day SMA

EUR/USD: mixed near-term impact, with the broader bias still moderately bearish.

The move toward 1.1490–1.1500 appears more like a corrective rebound driven by softer USD conditions than a confirmed trend reversal. The key market issue is the still-wide policy-rate differential: the Fed’s benchmark range of 3.75%–4.00% remains materially above the ECB deposit rate of 2.50%, preserving a dollar carry advantage even though both central banks are described as maintaining hawkish stances.

For EUR/USD, the immediate upside case depends on whether the pair can sustain a break above the 100-day SMA near 1.1550 and then the Bollinger midpoint around 1.1595. Without that confirmation, the rebound may attract selling as traders continue to price stronger relative US yields or a more hawkish Fed reaction to inflation. The source identifies 1.1475 as initial support, with breaks potentially exposing 1.1377 and 1.1324.

The ECB’s hawkish communication is a partial counterweight. Market pricing reportedly assigns slightly better than even odds to an October hike and expects roughly 36 basis points of tightening by December, which could support the euro if confirmed by inflation persistence or stronger Eurozone data. However, that support may be limited if the ECB’s tightening is interpreted as a response to conflict-related inflation rather than improving growth prospects.

Trading interpretation:

• Short term: modestly supportive for EUR/USD while the USD remains soft, but vulnerable to reversal around 1.1550.
• Medium term: bearish-to-neutral unless price reclaims and holds above the 100-day SMA and 1.1595.
• Cross-market effect: renewed US rate expectations would favor the USD, pressure EUR/USD and potentially weigh on gold and other dollar-sensitive assets; softer Treasury yields or dovish Fed guidance would have the opposite effect.

The most important catalyst is Federal Reserve Governor Michelle Bowman’s speech, followed by changes in US and Eurozone rate expectations. Traders should also monitor Treasury yields, the dollar index, Eurozone inflation and activity data, and whether EUR/USD can hold above 1.1475 without relying solely on temporary USD weakness. The RSI near 38 indicates weak momentum but not an oversold condition, so downside continuation remains technically possible.