EUR/USD Price Forecast: Bears retain control below 200-SMA on H4; break of 1.1400 awaited

EUR/USD struggles to gain any meaningful traction as traders keenly await the crucial ECB meeting.
Reviving inflation fears bolster Fed hike bets and underpin the USD, capping the upside for the pair.
Last week’s failure near the 200- SMA on H4 favors bears and backs the case for further depreciation.

The EUR/USD pair is seen consolidating during the Asian session on Tuesday and trading just above the 1.1400 mark, or a four-day low touched the previous day. Market participants seem hesitant and keenly await the highly-anticipated European Central Bank (ECB) meeting on Thursday before positioning for the next leg of a directional move.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

In the meantime, energy-driven inflation fears bolster US Federal Reserve (Fed) rate hike bets and support the US Dollar (USD) amid escalating US-Iran tensions. This could act as a headwind for the EUR/USD pair, warranting caution before confirming that the recent pullback from a four-week high, touched last Wednesday, has run its course.

Spot prices keep a bearish tone following last week's failure near the 1.1480-1.1485 region, which coincides with the 200-period Simple Moving Average (SMA). Moreover, the Moving Average Convergence Divergence (MACD) indicator remains below zero with a negative reading, while the Relative Strength Index (RSI) at 40.95 stays under the midline.

Momentum indicators together suggest waning bullish momentum and reinforce the downside bias while the EUR/USD pair remains capped beneath the 200-period SMA. This, in turn, backs the case for an eventual break below the 1.1400 round figure and a further decline towards retesting the year-to-date low, around the 1.1325 region, touched on June 24.

On the topside, initial resistance is located at the 200-period SMA around 1.1480. A sustained move above this level is needed to ease the current bearish pressure and open the way for a more constructive outlook. Nevertheless, the sub-50 RSI and negative MACD suggest that the path of least resistance for the EUR/USD pair remains to the downside.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

EUR/USD 4-hour chart

Economic Indicator

ECB Press Conference

Following the European Central Bank’s (ECB) economic policy decision, the ECB President gives a press conference regarding monetary policy. The president’s comments may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. If the president adopts a hawkish tone it is considered bullish for the EUR, whereas if the tone is dovish the result is usually bearish for the Euro.