The EUR/USD currency pair is trading close to a three-month low, approaching critical support levels amid widening spreads between two-year US Treasuries (UST) and European Government Bonds (EGB). According to FX Street, Societe Generale’s FX strategy team highlights that EUR/USD is moving toward the June low at 1.1325.
Societe Generale identifies key support levels at 1.1325 and 1.1270, with resistance marked at 1.1410. The widening 2-year UST/EGB spread, coupled with anticipation around upcoming US economic data releases — including the Personal Consumption Expenditures (PCE) and Non-Farm Payrolls (NFP) reports — are factors pulling EUR/USD closer to these vital technical levels, FX Street reported.
For Japanese investors, monitoring these developments is crucial as shifts in EUR/USD and US Treasury spreads can influence global risk sentiment and impact FX and equity flows in the region, particularly given Japan’s sensitivity to US economic trends.