Euro: Testing support against US Dollar with ECB risk – Societe Generale

FXStreet Insights Team FXStreet

Societe Generale strategists highlight that EUR/USD remains under pressure after slipping below its 200-day moving average in May, with spot trading near a two‑month low. The pair is holding just above the April trough around 1.1500, with nearby options expiries and European Central Bank (ECB) communication seen as key drivers for whether support at 1.1500 holds or a deeper decline unfolds.

Pair hovers near critical support

"EUR/USD has extended its pullback after slipping below the 200-DMA in May. It has tentatively held above the April trough near 1.1500."

"Should a short-term bounce materialize, the recent pivot high around 1.1645/1.1675, which coincides with the 200-DMA, may act as an important resistance."

"A break below 1.1500 may deepen the decline towards the next projections at 1.1440 and the lower bound of the multi-month range near 1.1410/1.1390."

"With all the uncertainty in mind, the ECB is unlikely to start the firing gun today on a tightening cycle. Three hikes by early 2027 is aggressive. Market reaction will depend on the new inflation projections and underlying technical assumptions."

"A split decision and olive branch to the council doves (no pre-commitment) can in theory bull steepen the curve and pressure EUR/USD towards 1.15."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD clings to gains near 1.1550 ahead of ECB rate decision

EUR/USD trades in positive territory near 1.1550 in Thursday's European trading hours. Rising bets that the European Central Bank will deliver a rate hike after its June policy meeting, keeping the Euro underpinned against the US Dollar. The focus will be on the ECB's updated projections and Lagarde's words.

GBP/USD: Gains remain capped below 1.3400 ahead of US PPI

GBP/USD is consolidating the rebound below 1.3400 in the European session on Thursday. However, the upside potential appears limited amid increased hawkish Fed bets and looming Mideast geopolitical risks, which could limit the US Dollar's pullback ahead of US PPI data.

Gold sticks to modest recovery gains near $4,100; looks to US PPI for fresh impetus

Gold fades a modest Asian session bounce to the $4,118 region, though it manages to hold above the lowest level since November 2025. A softer Core US Consumer Price Index eased concerns about a runaway inflation spiral, weighing on the US Dollar and prompting some intraday short-covering around the precious metal.

XRP and XLM: Mild recovery attempts emerge amid mixed market signals

Ripple (XRP) and Stellar (XLM) show mild signs of recovery on Thursday after extending losses earlier this week. XRP is holding above the $1.10 level as bearish momentum begins to fade, while XLM has bounced modestly from a key support zone.

European Central Bank set to hike interest rates for first time in nearly three years

The European Central Bank is set to announce its monetary policy decision at 12:15 GMT following its June meeting. The Frankfurt-based institution is widely expected to raise its key interest rates by 25 basis points, taking the deposit facility rate to 2.25% from 2%.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.