Euro: Range trading against US Dollar in low vol regime – ING
ING notes EUR/USD remains range-bound in a low-volatility regime, with spot near 1.1500 well below the bank's own Dec26 target of 1.2200. The consensus gap we track—3.5-4% below the median—highlights persistent divergence between near-term trading reality and longer-term forecasts. This comes as rate differentials and growth narratives fail to provide a catalyst for breakout, keeping options markets depressed.
Where it sits in our coverage
Our consensus EUR/USD Dec26 target stands at 1.2200 (median across eight firms), with Deutsche Bank and Goldman at the bullish end (1.2500) and Morgan Stanley at the bearish outlier (1.1600). ING's view at 1.2200 aligns with the center of the distribution, but their characterization of range trading under low vol suggests they see limited upside conviction in the near term—consistent with the 1.1500 spot print.
How firms align
ING's neutral-to-modestly-bullish stance is shared by JPMorgan (Dec26 1.2000) and BofA (1.2200), both of which target levels near the consensus. Morgan Stanley is the notable contrarian with a sub-consensus 1.1600 year-end target, while Goldman and Deutsche Bank are the most aggressive bulls at 1.2500. The wide 1.1600–1.2500 range underscores the lack of conviction among banks, itself a hallmark of range-trading regimes.
What the data shows
All eight firms reaffirmed their targets on May 5 without revision, confirming no near-term catalyst has shifted medium-term views. Our published research (/research/eurusd-consensus-gap-may-2026-20260513-1104) highlights that spot has traded 3.5% to 3.9% below consensus for weeks, suggesting the market is pricing in risks not yet captured in bank forecasts.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD stuck in low-vol range near 1.1500, 4% below Dec26 consensus of 1.2200.
- 02Bank targets split from 1.1600 (Morgan Stanley) to 1.2500 (Goldman, DB), reflecting no clear directional bias.
- 03No revisions in 14 days implies market awaiting a catalyst; ECB/U.S. data next on radar.
- 04Range-trading regime favors selling into rallies toward 1.18-1.19, buying dips toward 1.13.
Market implications
Watch the 1.1500 level for signs of a breakout; a sustained move below 1.1400 would challenge the consensus median and likely trigger a round of downgrades. The next ECB meeting and U.S. CPI release are the most immediate events that could break the low-vol pattern. Our Dec26 consensus of 1.2200 remains the anchor for the bullish medium-term view.
Risks to this view
A hawkish surprise from the Fed or a sharp deterioration in eurozone growth data could push spot below 1.13, breaking the range and invalidating the consensus bull case. Conversely, a decisive break above 1.18 would require a fundamental catalyst—such as a U.S. recession scare—that is not currently priced.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
Sources & References
How we cover this story
Other coverage on this pair
Euro: Limited downside against US Dollar with ECB hike message – MUFG
ECB's continued hike messaging supports EUR/USD floor around current levels; limited downside signals reduced momentum for USD longs.
Euro: Gains capped against US Dollar by Fed story – ING
Fed rate expectations remain supportive of USD strength, structurally limiting EUR/USD upside despite recent euro resilience.
EUR/USD Price Forecast: 20-day EMA remains key barrier as Iran uncertainty persists
Euro slips as Hormuz firefight revives US Dollar demand
Geopolitical risk in Persian Gulf elevates safe-haven demand, likely to support USD/JPY parity and cap EUR/USD downside until tensions clarify.
Bank desks on this topic
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
EUR/USD was hit in March on expectations that the stagflationary shock from Iran would resonate more in Europe than the US. The inflationary effects have been plain for all to see, but this week's release of European PMIs warns that the stagnationary effect is just starting to la
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? - eFXdata
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? eFXdata
Cross-firm research
EUR/USD Trades 3.16% Below Dec-26 Consensus as 18 Firms Hold 1.20 Median
With spot at 1.1621 and the 18-firm median Dec-26 target at 1.20, EUR/USD sits 3.16% below consensus—a gap that demands explanation.
EUR/USD Trades 3.2% Below Dec-26 Consensus as Targets Cluster Near 1.20
Spot at 1.1612 sits 3.2% below the 18-firm median Dec-26 target of 1.20, exposing a consensus that remains structurally bullish EUR despite the pair's failure to close the gap.
EUR/USD Trades 4% Below Dec-26 Consensus: What the Gap Reveals
EUR/USD spot at 1.1711 sits 4.01% below the eight-firm median Dec-26 target of 1.22, exposing a structural tension between macro conviction and current tape.