EUR/USD Price Forecast: Break Below 1.1100 to Open Further Downside Room

EUR/USD traded on a weak footing during the European session on Wednesday, last seen around 1.1156, extending the decline triggered by hot US inflation data. Market concerns that the Federal Reserve may adopt a more hawkish stance on rate hikes provided support for the dollar, keeping the pair under sustained pressure.

**Technical Outlook Stays Bearish, Key Support Under Test**

The daily chart shows EUR/USD remains below the 100-day simple moving average, with the broader bearish structure intact. Although the Relative Strength Index has stabilized near 48.9, indicating downside momentum is not accelerating, the pair's rebounds continue to face resistance in the 1.1180-1.1202 zone. Market signals indicate the price is currently testing initial support near 1.1130, a key near-term bull-bear demarcation line. A clear break below this level would first target the psychological barrier at 1.1100.

**Break Below 1.1100 to Trigger Deeper Pullback**

Once the 1.1100 level is decisively breached, the technical setup would open new downside room. According to analysis, subsequent support levels would be seen at 1.1016 and then the 1.0949 region. Further out, the May 2025 low of 1.0951 would form a key defense line. On the upside, the pair needs to reclaim ground above 1.1180 to alleviate immediate selling pressure, with more critical resistance located near 1.1255 and the 100-day moving average around 1.1420.

**Fundamental Pressures Persist, Focus Shifts to Policy Expectation Changes**

The recent dollar strength primarily stems from a market reassessment of the Fed's policy path. Hot inflation data has dampened expectations for a near-term policy shift, repeatedly stalling EUR/USD rebounds. However, some analysts note the pair may first undergo a technical correction toward the 1.1180 level in the short term before resuming its downtrend. Overall, in the absence of substantive positive catalysts, the euro's weak consolidation pattern against the dollar is expected to persist.