EUR/USD to reach 1.20 level as UBS forecasts weaker dollar ahead - Investing.com

What the desk is arguing

The argument for EUR/USD climbing towards the 1.20 level relies heavily on anticipated dollar weakness in the coming months. UBS highlights that the combination of a more accommodative Federal Reserve policy and positive momentum in the Eurozone could catalyze a shift in the currency pair toward this significant level.

Additionally, the current trading environment shows strong consensus forecasts from major banks which substantiate this bullish narrative. A number of firms, including Morgan Stanley and ING, have recently raised their price targets for EUR/USD, suggesting broader market alignment with UBS's bullish outlook.

Where it sits in our coverage

Currently, our consensus target for EUR/USD stands at 1.1800 for March 2026, with a range observed between 1.1700 and 1.2000. This outlook is closely aligned with UBS’s view for a weaker dollar, underscoring a general consensus among firms that EUR/USD has growth potential.

Specific firm targets for December 2026 illustrate this bullish trend:

• JPMorgan: 1.2000
• Goldman: 1.2500
• Deutsche Bank: 1.2500

How other firms see it

While UBS's optimistic outlook resonates with many in the market, certain firms remain more cautious. For instance, BofA has projected the EUR/USD at a lower target in the same timeframe due to ongoing uncertainties in economic recovery dynamics.

Overall, the prevailing trend suggests a consensus leaning toward further euro appreciation, though some notable firms emphasize the potential for dollar resilience in their outlooks.