Societe Generale’s Kenneth Broux highlights renewed Dollar strength pressuring EUR/USD towards the key 1.10 level, with the pair already below its 200-week moving average and challenging the May 2025 trough.

Euro pressured by rates and politics

“EUR/USD down 10 big figures since January and in trouble after erasing 200wma (1.1110).”

“Throw in the uncertainty relating to the French Presidential election next April, the succession before that at the helm of the ECB in February, the bearish seasonality that typically governs the single currency early in the new year, and you have a toxic backdrop that keeps EUR/USD on a slippery slope.”

“If the Fed then seriously considers a back-to-back hike in January (provided it doesn’t deliver a jumbo 50bp in December), EUR/USD could find itself in trouble below 1.10 in early 2027, if not sooner.”

“A further 3.5% decline from around current levels would take EUR/USD towards 1.0620, the long-term ascending trend line connecting the 2022 low of 0.9536 and the 2025 low of 1.0141.”