Euro gains as US Dollar moves sideways amid market caution
The Euro has gained momentum as the US Dollar exhibits consolidation, reflecting a market cautiousness amid evolving geopolitical and economic landscapes. This dynamic, while creating near-term strength for EUR/USD, rests significantly on the absence of new hawkish signals from the Federal Reserve. Traders are closely monitoring how these macro conditions may influence rate divergences in the coming quarters, particularly as confidence builds in the Eurozone's recovery trajectory.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1700 (median across 11 firms), with Goldman at the upper end of the range (1.1800) and Citi at the lower end (1.1300).
How firms align
JPMorgan maintains a bullish stance with a March target of 1.1800, aligning well with the current sentiment suggesting further gains in the Euro. In contrast, Citi is more cautious, positioning itself at the lower end of the spectrum with a target of 1.1300 for March 2026.
What the data shows
Recent forecast revisions show that MUFG raised its March target to 1.1800, while HSBC is consistent at 1.1700. This aligns with our internal publication, which indicates that EUR/USD is currently trading significantly below consensus expectations outlined in our recent research /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD holds at 1.1434 with strong potential for upsides towards 1.17.
- 02Traders should watch for key Fed signals that may alter USD sentiment.
- 03Market positioning suggests a cautious upward revision in forecasts, especially if the Eurozone data surprises positively.
Market implications
Upcoming economic data releases from the Eurozone and Fed communications will be crucial. A break above 1.15 could accelerate bullish sentiment, while any hints of Fed tightening would be a key watchpoint against our consensus target of 1.1700.
Risks to this view
Any aggressive tightening from the Fed or an unexpected downturn in Eurozone economic indicators could invalidate the current bullish view on EUR/USD, pushing it back to levels closer to Citi's target at 1.1300.
Sentiment by currency
USD~EUR+JPY~GBP~Composite USD score: -0.30
Sources & References
How we cover this story
Other coverage on this pair
Euro: Upside bias against US Dollar as ECB repriced – Scotiabank
ECB repricing cycle supports EUR/USD recovery; USD weakness likely to persist as rate differentials compress.
Euro: Upside bias held above strong support against US Dollar – UOB
EUR/USD holding above key support level suggests technicians see limited near-term downside and may increase bids on dips toward 1.08–1.09 levels.