Euro: Resilient data backs range rebound against US Dollar – MUFG
The euro's recent rebound against the US dollar has been supported by robust economic data from the eurozone, highlighting underlying strength in the region. MUFG's commentary signals a shift in sentiment, reinforcing the bullish outlook on the euro in the near term. As traders look for confirmation of this trend, focusing on resistance levels will be crucial to gauge whether a sustained breakout is achievable.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700 (median across firms), with Commerzbank pegging the upper limit at 1.1900 and Citi on the lower at 1.1300. This indicates a solid optimism surrounding the euro, particularly in light of MUFG's recent commentary on the resilience of eurozone data.
How firms align
MUFG's position at 1.1800 for March aligns with the general bullish sentiment observed among several firms, including Goldman at 1.1800 and Stanchart at 1.1400. Notably, Commerzbank reflects even higher expectations with a target of 1.1900, suggesting a strong consensus towards euro strength in the upcoming months. For further insight, see our reports on scotiabank and investec.
What the data shows
Recent forecast adjustments reflect a bullish sentiment shift, with corrections from MUFG raising their March target to 1.1800 and Scotiabank adjusting to 1.1734. For a broader analysis, refer to our report on the ECB rate path /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EU economic data supports EUR/USD recovery; consensus target at 1.1700.
- 02Traders eye 1.1500 for potential breakout confirmation.
- 03Watch for upcoming eurozone economic releases as key catalysts.
- 04MUFG forecasts a more aggressive near-term rebound to 1.1800.
Market implications
Next week’s eurozone data releases could define the short-term trajectory for EUR/USD, with a keen eye on breaking above the 1.1500 resistance. Sustained movement beyond this level could align with our consensus forecast at 1.1700.
Risks to this view
Failure to meet expectations in upcoming economic indicators would cloud the euro’s current bullish outlook, particularly if the dollar strengthens significantly due to US economic data surprises or hawkish Fed signals.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.35
Firms mentioned
Sources & References
How we cover this story
Other coverage on this pair
Euro: Soft tone against US Dollar with stable ECB expectations – Scotiabank
ECB's hold pattern removes upside catalyst for EUR/USD near-term, favoring USD strength on rate differential persistence.
Euro: Range-bound against US Dollar under Fed support – ING
Fed policy support underpins USD strength, constraining EUR/USD upside and suggesting range trades favor dollar longs.