EUR/USD: Losses steady near support – Scotiabank
EUR/USD has edged lower, trading near the 1.1500 support area, with losses steadying as the pair holds above key technical levels. Scotiabank's framing suggests the consolidation reflects contained selling pressure, though a break below support could trigger incremental USD strength. This matters now because the pair is testing a critical zone that has held since early March, and a decisive move lower would align with the broader bearish sentiment driven by a hawkish Fed repricing. The headline adds a tactical layer to the prevailing view that EUR/USD is vulnerable to further downside, but the lack of a breakdown keeps the near-term outlook balanced.
Where it sits in our coverage
Our consensus EUR/USD target for Mar26 sits at 1.1800 (median across 8 firms), with Morgan Stanley at the upper bound (1.2000) and BofA and Barclays at the lower bound (1.1700). Scotiabank's view aligns more closely with the lower third of the range, as the support level at 1.1500 is significantly below the consensus median, suggesting the bank sees downside risks that many peers do not fully price in. The divergence between spot (1.1500) and the Mar26 consensus (1.1800) implies a 2.6% appreciation expected, yet the current price action suggests market participants are skeptical of that recovery.
How firms align
Morgan Stanley's Dec26 target of 1.1600 is notably bearish and aligns with Scotiabank's cautious tone, while Barclays (Mar26 1.1700) and BofA (Mar26 1.1700) also lean toward the lower end. In contrast, Goldman (Mar26 1.1800) and ING (Mar26 1.1900) forecast a stronger euro, implying a more bullish stance that disagrees with the headline's emphasis on support testing. JPMorgan and MUFG sit near the median, leaving the consensus split between those expecting a floor and those projecting a rebound.
What the data shows
Our recent research "EUR/USD Consensus at 1.22 While Spot Sits 3.87% Below" (slug: eurusd-consensus-divergence) underscores the gap between analyst expectations and spot pricing, reinforcing the view that consensus may be too optimistic. The headline's focus on support at 1.1500 aligns with the bearish skew in that research, highlighting that a break lower would further widen the divergence and pressure consensus targets lower.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD consolidation near 1.1500 support suggests selling pressure contained for now.
- 02Break below 1.1500 could open door to 1.1400 and channel incremental USD strength.
- 03Consensus Mar26 target at 1.1800 faces downside risk if support fails.
- 04Morgan Stanley's Dec26 1.1600 target reinforces bearish longer-term view.
Market implications
Watch for a decisive break below the 1.1500 support level; a daily close below would confirm bearish momentum and likely trigger stops, driving EUR/USD toward the 1.1400 area. The next key calendar event is the ECB decision on 7 Mar, where any dovish tilt could accelerate the downside. Our consensus Mar26 target of 1.1800 provides a bullish reference if support holds, but the burden of proof is on euro bulls.
Risks to this view
A stronger-than-expected eurozone data or hawkish ECB commentary could invalidate the bearish view, pushing EUR/USD back above 1.1600 and toward the consensus median. Additionally, a broad USD turnaround driven by a less hawkish Fed or risk-on flows could reverse the recent dollar strength and lift EUR/USD. The key catalyst would be a sustained break above the 1.1600 resistance level.
Sentiment by currency
USD+EUR-JPY~GBP~Composite USD score: +0.30
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD strengthens as mixed US labor data and hopes for a US-Iran deal pressure the Greenback.
Soft US labor print reduces Fed rate-hike conviction; geopolitical risk-off from Iran talks risk-off flows weaken USD safe-haven demand.
EUR/USD: Recovery eyes full retracement – Scotiabank
EUR/USD recovery momentum suggests technicians are positioning for mean reversion toward recent highs, indicating potential USD weakness into resistance.
EUR/USD: Binary path around Gulf deal – ING
EUR/USD: Oil shock, real rates and conflict risks – Commerzbank
Oil shock transmission via real rates and geopolitical premium widens USD carry advantage; EUR structural support erodes as terminal rates diverge.
Cross-firm research
EUR/USD Trades 3.87% Below Consensus: What the Gap Reveals
EUR/USD spot at 1.1727 sits 3.87% below the eight-firm median Dec-26 target of 1.22, exposing a structural divergence that demands explanation.
EUR/USD Consensus at 1.22 While Spot Sits 3.87% Below
Eight sell-side firms hold a median Dec-26 target of 1.22 for EUR/USD while spot trades at 1.1727, a gap that demands explanation.