Societe Generale analysts report that the EUR/USD currency pair is currently lacking a clear directional trend, trading around its 200-day moving average and nearing an ascending trend line established since February 2025 [1]. The pair faces notable resistance in the 1.1750/1.1800 range, while support levels are identified near 1.1500 and further down at 1.1410/1.1390, which marks the lower boundary of a multi-month trading range [1].
The analysts highlight that softer Eurozone Purchasing Managers' Index (PMI) data and expectations of further European Central Bank (ECB) tightening, contrasted with a less dovish stance from the US Federal Reserve, are weighing negatively on the euro [1]. Higher US yields and the possibility of a shift in the Federal Open Market Committee's (FOMC) bias from dovish to neutral in June are also considered euro-negative factors [1].
Market pricing currently reflects expectations of nearly two ECB rate hikes by September and three by April of the following year [1]. Societe Generale suggests that this environment could favor receiving the front-end in Europe versus the US, where a more neutral Fed could anchor the front end, potentially leading to further downside for EUR/USD [1].
While a brief bounce in EUR/USD cannot be ruled out, the overall outlook remains cautious, with technical and fundamental factors both pointing to potential further weakness for the euro against the US dollar [1].
CONCLUSION
EUR/USD remains directionless as technical resistance and support levels are closely watched, with market sentiment leaning negative due to softer Eurozone data and expectations of ECB tightening versus a less dovish Fed. The outlook suggests potential further downside for the euro, especially if US yields remain elevated and the Fed shifts to a more neutral stance.