EUR/USD drifts below 1.1700 as the US Dollar bounces on cautions trading
EUR/USD edged below 1.1700 as the US Dollar benefited from a cautious risk tone. The pair's drift reflects safe-haven demand for the greenback, with spot now roughly 3.87% below our consensus median of 1.18 for March 2026. This divergence between near-term price action and medium-term forecasts suggests the market is pricing in a more protracted USD bid, potentially on concerns over global growth or trade frictions. The 1.1700 level acts as a psychological pivot; sustained breaks could test support near 1.1500, where spot currently sits.
Where it sits in our coverage
Our consensus EUR/USD target for March 2026 stands at 1.1800 (median across 8 firms), with Morgan Stanley the most bullish at 1.2000 and BofA/Barclays the most bearish at 1.1700. The current spot at 1.1500 is well below the consensus, implying analysts see upside over the 6-month horizon. Fxstreet's risk-off narrative aligns more closely with the bearish end of the spectrum — BofA and Barclays share that cautious view, targeting 1.1700.
How firms align
JPMorgan, Goldman, and ING maintain forecasts in the 1.18-1.19 range for March 2026, above spot but below Morgan Stanley's 1.20. The headline's USD‑bullish tilt is at odds with Morgan Stanley's optimistic EUR outlook, while BofA and Barclays are more aligned. The wide spread (1.1700-1.2000) underscores the lack of consensus on the near-term trajectory.
What the data shows
Our recent research, '/research/eurusd-consensus-divergence-may-2026', highlights this disconnect: consensus targets imply 3.87% upside from current levels, yet spot continues to weaken. No firm has revised forecasts in the past week, so the market is testing the credibility of those targets.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD broke below 1.1700 on USD safe-haven buying; next support at 1.1500.
- 02Consensus March 2026 target of 1.1800 sits 3.87% above spot, highlighting a divergence.
- 03Risk-off flows driving USD; watch for catalyst like Fed rhetoric or equity selloff to sustain the move.
- 04Wide firm range (1.1700-1.2000) signals high uncertainty on near-term EUR direction.
Market implications
Watch for a test of the 1.1500 support level, which aligns with the lower end of our consensus range. A break below would open the door toward the 1.1300 area. Key calendar risk this week: Eurozone CPI data and US ISM manufacturing. If risk aversion persists, USD gains may accelerate, questioning the viability of our 1.1800 consensus target.
Risks to this view
A shift in risk sentiment — such as a de-escalation in trade tensions or stronger-than-expected Eurozone data — could reverse USD gains and propel EUR back above 1.1700. Also, if Fed signals a more accommodative stance, the USD bid may fade, validating the consensus's upside view.
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.