Societe Generale strategists report EUR/USD falling below 1.12, citing rising debt contagion risks and strong US Dollar demand as key drivers for the currency's recent weakness.
The EUR/USD pair is facing downward pressure as Societe Generale strategists observe a significant breach of the 1.12 support level. This decline is driven by widening European debt spreads and persistent demand for the US Dollar, causing the pair to deviate substantially from the ECB's long-term technical assumption of 1.16 for the 2026-2028 period.
The European Central Bank maintains a technical assumption of 1.16 for the 2026-2028 period.
The decline is attributed to widening European spreads and strong demand for the US Dollar.
The Euro faces renewed selling pressure as widening European yield spreads and robust US Dollar demand push the pair below the 1.12 threshold. Societe Generale strategists note this decline significantly undershoots the European Central Bank's long-term technical assumption of 1.16 for the 2026-2028 period.
The Euro is under pressure due to widening European yield spreads and concerns regarding debt contagion, which are increasing demand for the US Dollar as a safe-haven asset.