EUR/USD forecast as Goldman Sachs predicts a return to dollar slide - TradingView
At a Glance
Goldman Sachs' recent forecast on EUR/USD indicates a renewed decline for the dollar, suggesting that the euro may regain ground as the Fed's tightening cycle approaches its end. This sentiment aligns with broader market expectations that inflation will stabilize, providing a favorable backdrop for the euro against the US dollar.
Key Takeaways
- 01Goldman Sachs predicts a renewed dollar decline, aligning with bullish EUR forecasts.
- 02Consensus for EUR/USD targets is trending higher, reflecting broader market optimism.
- 03Divergence exists among firms, with some expressing caution about the euro's potential.
Full Analysis
What the desk is arguing
The analysis from Goldman Sachs, predicting a downturn in the dollar, is shaping expectations for a stronger euro moving forward. This forecast underscores a potential shift in market dynamics, where factors such as monetary policy and inflation trajectories are likely to favor the euro's appreciation against the dollar.
Supporting this thesis, multiple firms are positioning their forecasts for EUR/USD higher across different tenors, with targets suggesting a consensus alignment around 1.22 for December 2026. The implication of this view is that the current market pricing may undervalue the euro, indicating room for upward adjustments as market conditions evolve.
Where it sits in our coverage
Currently, our consensus target for EUR/USD sits at 1.2200 for December 2026, reflecting a range that is consistent with Goldman Sachs' upward revision to 1.2500. This suggests a converging outlook among major institutions, positioning the euro favorably relative to the dollar.
Specific mentioned targets from other firms include: - JPMorgan: Dec26 1.2000 - Deutsche Bank: Dec26 1.2500 - Morgan Stanley: Dec26 1.1600
How other firms see it
While Goldman Sachs leads the charge with its bullish projection, several firms share similar sentiments regarding the euro's prospects. Both Deutsche Bank and MUFJ are advocating for a higher valuation of the euro, indicating a broader consensus on euro strength.
Conversely, Morgan Stanley presents a more cautious target, aligning with a less optimistic view at 1.1600 for December 2026, diverging from the prevailing bullish trends set by other firms. Overall, this highlights an emerging divergence in the market that could influence trading strategies moving forward.
Market Implications
The outlook from Goldman Sachs and consensus among banks suggests traders could see increased bullish momentum in EUR/USD, potentially leading to strategic shifts in positioning. This trend may influence hedging strategies and asset allocation, emphasizing the importance of staying alert to macroeconomic factors affecting both currencies.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Rabobank | Bearish | 1.1000 |
ING | Bullish | 1.1300 |
MUFG | Neutral | 1.1200 |
From the original
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Goldman Sachs is forecasting a significant decline in the U.S. dollar, particularly against the euro, predicting a target of 1.2500 for EUR/USD by December 2026. This aligns with other firms' positive outlooks on the euro, reinforcing the prospect of dollar depreciation amid global economic shifts and relatively stronger performance from the European economy.
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Goldman Sachs: Rolling our EUR/USD forecasts higher - TradingView
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