EUR/USD falls to fresh five-week low as dollar firms in final stretch of the week

What the desk is arguing

The desk frames this as a critical juncture for EUR/USD, highlighting the recent drop to 1.1630 as indicative of a broader bearish trend. The breakdown below the 200-day moving average, previously a support level, signals potential for further declines, particularly if geopolitical tensions remain unresolved.

The significance of this price action is underscored by the fact that the euro has been trapped in a range between 1.1800 and the 200-day moving average since mid-April. As noted, the current trajectory suggests a possible test of the 1.1500 level if no positive developments emerge from the Middle East over the weekend.

Where it sits in our coverage

Our consensus target for EUR/USD is 1.075, with a range between 1.04 and 1.12. Key firms contributing to this outlook include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)

This view aligns with jpmorgan, which is positioned at the upper end of the range, while bofa presents a more bearish stance at the lower end. The desk's bearish outlook is consistent with the prevailing sentiment among these firms.

How other firms see it

Firms like jpmorgan and citi are aligned with the desk's bearish perspective, anticipating further weakness in EUR/USD. Conversely, bofa holds a contrary view, suggesting a more optimistic outlook for the euro against the dollar.

Traders should also keep an eye on related currency pairs such as USD/JPY and GBP/USD, as movements in these pairs may reflect broader market sentiment influenced by geopolitical developments and central bank policies.

What the calendar says

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