EUR/USD Price Forecast: Declines below 1.1100, negative outlook remains intact under 100-day SMA

• EUR/USD weakens to around 1.1080 in Thursday’s early European session.
• The pair maintains a negative tone below the 100-day SMA, with bearish RSI momentum.
• The first upside barrier emerges in the 1.1090-1.1100 region; the initial support level is seen at 1.1000.

The EUR/USD pair declines to near 1.1080 during the early European trading hours on Thursday. A cautious stance from the European Central Bank (ECB) weigh on the Euro (EUR) against the US Dollar (USD). ECB policymaker Philip Lane said that energy prices may be falling, but the central bank’s interest rate ‌decisions will depend on how strongly the recent surge in fuel costs spreads to wages and other prices.

On the other hand, bets on a 50-basis-point Federal Reserve (Fed) rate hike in December started to grow after a hotter-than-expected US inflation report and comments by Fed governor Christopher Waller. Waller said that he would support a quarter-point rate increase in December and might push for a half-point move if inflation data is worse than expected.

Traders await the US October Producer Price Index (PPI) data on Friday for more clues about the interest rate path. The headline PPI is expected to show a rise of 6.6% YoY in October, while the core PPI is projected to show an increase of 5.0% YoY during the same report period.

Euro outlook softens as ECB caution contrasts with Fed tightening

Strategists at Rabobank note that “the Fed is not the only G10 central bank widely expected to hike rates in December,” with the ECB “among those banks also likely to tighten policy.” However, they caution that “the ECB, however, could prove to be reluctant to hike rates beyond December,” pointing to signals from “the last ECB press conference” which “suggested that the GC were becoming increasingly concerns about the growth outlook.” In Rabobank’s house view, “market pricing for 2027 ECB rate rises remains too aggressive,” and they add that “another factor that could weigh on the EUR in the coming months are uncertainties about what a far-right president in France could mean for EU cooperation going forward.” Against this backdrop, Rabobank “forecast a move to EUR/USD1.10 on a 3-month view.”

Lane stresses consensus and delayed inflation response, modestly supportive for the Euro

Lane’s speech score of 6.2/10 matches the historic average on FXS Speechtracker, signaling a neutral overall impact but with a slight hawkish tilt. Emphasis on a “high premium on consensus” and a “high bar on directional forward guidance” suggests the ECB is reluctant to pre-commit on the policy path, yet wants flexibility via instruments for “multiple equilibriums” in the bond market, which can underpin Euro stability.

Lane’s focus on underlying inflation as a guide to one-year-ahead inflation, and the expectation of second-round effects, points to concern that price pressures may prove persistent even as energy prices reverse. The notion that headline inflation could fall while underlying inflation rises reinforces a cautious stance on easing, modestly supportive for the Euro as markets may price a slower and more conditional path to rate cuts.

Technical Analysis: Bearish outlook of EUR/USD remains intact below the 100-day SMA

In the daily chart, EUR/USD extends its slide beneath all visible moving average and volatility benchmarks to keep a clear bearish bias in place. The 100-day simple moving average (SMA) stays well above spot, reinforcing a medium-term capped structure, while price also trades under the Bollinger Bands (20, 2) lower band, hinting at persistent selling pressure around the recent lows. The Relative Strength Index (14) has recovered to 36 but remains below the neutral 50 line, suggesting only modest relief in momentum within an overall weak environment.

On the topside, initial resistance level emerges in the 1.1090-1.1100 zone, representing the lower limit of Bollinger band and the psychological level. Any follow-through buying above this level could pave the way to the middle band at 1.1180, en route to the upper boundary of Bollinger band at 1.1275 and the 100-day SMA at 1.1405. 

On the downside, the 1.1000 round figure act as a key support level for the major pair. Sustained traing below the mentioned level could expose the May 12, 2025 low of 1.0951, followed by the May 27, 2025 low of 1.0733. 

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