Societe Generale warns that EUR/USD faces a toxic backdrop as it trades below its 200-week moving average of 1.1110. Analysts highlight that a breach of the 1.10 level could trigger a 3.5% decline toward 1.0620, driven by potential Federal Reserve rate hikes, French election uncertainty, and upcoming ECB leadership changes.
Bearish
🤖 60%
Societe Generale notes EUR/USD down 10 big figures since January, below its 200-week moving average (1.1110) and testing the May 2025 trough near 1.10. A break below 1.10 targets a further 3.5% decline towards 1.0620, driven by Fed hike risk, French election uncertainty and bearish early-year seasonality. This is analyst opinion, so direction is clear but contingent on Fed and political events.
Catalysts
- ▼ Fed possibly delivering a jumbo 50bp cut in December or signaling a back-to-back hike consideration in January
- ▼ French Presidential election next April adding political uncertainty
Risk Factors
- ▲ Fed may not follow through on further policy moves assumed in the scenario
- ▲ The 1.10 level has not yet broken; the pair could hold above it