The Euro (EUR) has broken below its 50- and 200-day moving averages against the US Dollar (USD), reaching its lowest level since early April, according to Societe Generale analysts cited by FXStreet. This decline is attributed to wider UST/Bund spreads and higher energy prices, which have weighed on the single currency. The EUR/USD pair now finds support at 1.1560 and resistance at 1.1720 [1].
Societe Generale notes that the Euro is struggling as May reaches its midpoint, managing to stay just ahead of the Swedish Krona (SEK) and British Pound (GBP). The analysts highlight that the break of key averages signals vulnerability for the Euro, driven by Fed repricing, higher US Treasury yields, and rising oil and gas prices [1].
Additionally, European Central Bank (ECB) member Lane has expressed doubts over the likelihood of a rate increase at the next meeting, offering a more balanced assessment of growth versus inflation. The aggressive market pricing for a June ECB hike implies downside risks for the Euro against G10 peers if the ECB decides not to raise rates next month, assuming other factors such as oil prices, risk assets, and Fed policy remain unchanged [1].
CONCLUSION
The Euro's break below key technical levels and ongoing pressure from wider UST/Bund spreads and higher energy prices signal continued vulnerability. With doubts over an imminent ECB rate hike, downside risks for the Euro persist, especially if the central bank holds rates steady in June.