The euro is testing lower ground toward 1.13 against the dollar as concerns over Eurozone inflation pressures begin to ease, according to Societe Generale strategists. Kenneth Broux and his team point to weaker-than-expected PMI price indicators across the Eurozone combined with dovish commentary from ECB President Christine Lagarde as primary catalysts pushing EUR/USD lower. The bank identifies immediate support levels at 1.1390 and 1.1350 as traders recalibrate expectations around European monetary policy.
The softening inflation data challenges recent market narratives that European price pressures would remain stubbornly elevated, potentially limiting the ECB’s ability to ease policy. Lagarde’s dovish stance suggests the central bank may have more flexibility than previously anticipated, widening the monetary policy divergence between the ECB and other major central banks. Currency traders and brokers should watch these technical levels closely as EUR/USD approaches a critical psychological threshold.
FXnCO Insight
EUR/USD shorts gain conviction on weakening inflation signals—watch 1.1390 support for potential acceleration toward 1.1350 if dovish ECB rhetoric continues.
Source: FXStreet