EUR/USD Forecast: 1.1145 Support in Focus as RSI Hits 24.4, Bears Still Hold

EUR/USD trades near 1.1195 in early European trading on Thursday, keeping the pair below the 1.1200 psychological threshold as pressure on the euro intensifies. Concerns over France’s public finances have pushed French borrowing costs higher and widened the gap with German debt, while the U.S. dollar has strengthened after the latest Federal Reserve minutes reinforced expectations for another rate increase this year. The pair’s Relative Strength Index has fallen to 24.4, placing EUR/USD firmly in oversold territory and raising the prospect of a short-term rebound.

France’s Fiscal Risks Pressure Euro

France’s bond-market turmoil remains a major drag on the euro. Ten-year French government yields have approached 5%, while the spread over German Bunds has widened sharply as investors question the government’s ability to stabilize its debt and deficit. Reuters reported that the premium demanded for French debt over German bonds reached its highest level since the 2010-12 eurozone debt crisis.

The pressure is spilling into foreign-exchange markets because investors are increasingly concerned that fiscal stress in one of the eurozone’s largest economies could affect broader regional sentiment. The euro recently fell to a 17-month low near $1.1191, according to Reuters.

ABN Amro has argued that widening interest-rate spreads and political uncertainty have encouraged investors to increase short-euro and long-dollar positions. The bank nevertheless expects the current decline to stabilize and maintains its end-2026 EUR/USD forecast at 1.15.

Key market drivers include:

• French-German bond-yield spreads and fiscal concerns.
• U.S. rate expectations and incoming economic data.
• Oversold EUR/USD technical conditions.

Fed Minutes Keep Dollar Supported

The Fed minutes from the September 15-16 meeting provided another reason for dollar strength. All participants supported a 25-basis-point increase, taking the federal funds target range to 3.75%-4.00%. Most policymakers also judged that another increase would likely be appropriate by year-end, although future decisions will depend on incoming data.

That message has kept U.S. monetary policy comparatively restrictive while the euro faces pressure from weaker regional sentiment. Reuters reported that markets were leaning toward a pause at the Fed’s October meeting while still pricing a December increase.

Attention now turns to U.S. weekly jobless claims and comments from Fed officials. Strong labor-market data or hawkish Fedspeak could reinforce dollar demand and make it harder for EUR/USD to recover above 1.1200.

EUR/USD Technical Levels to Watch

The technical structure remains bearish. EUR/USD is trading below its 100-day simple moving average and the middle Bollinger Band, showing that sellers continue to control the broader trend. However, the RSI at 24.4 signals extreme downside momentum and leaves the pair vulnerable to a corrective bounce.

The first major support is the lower Bollinger Band near 1.1145. A sustained break below that level could expose 1.1050, the May 21, 2025 low, followed by the psychological 1.1000 mark and then 1.0951.

On the upside, 1.1276 is the first resistance, followed by the Bollinger middle band near 1.1380 and the 100-day SMA around 1.1495. A decisive move above 1.1495 would weaken the current bearish structure and bring the upper Bollinger Band near 1.1620 into view.

Conclusion

EUR/USD remains under pressure as French fiscal concerns combine with a firm U.S. dollar and expectations for another Fed rate increase. The 1.1145 area is now critical support, while the RSI reading of 24.4 warns that selling may be stretched. A break below 1.1145 would strengthen the bearish case, whereas a recovery above 1.1276 could signal that downside momentum is beginning to fade.