EUR/USD: Sentiment-led rally eyes 1.1825 – Scotiabank
Scotiabank highlights EUR/USD's sentiment-driven rally targeting 1.1825, reflecting broad USD weakness and momentum positioning. The move is backed by a bearish USD composite score of -0.35, though resistance at 1.1825 could cap near-term gains. The rally lacks fundamental catalysts, raising questions about sustainability. This is significant as spot currently sits at 1.1500, 3.87% below the median consensus of 1.1800, suggesting room for further upside if sentiment persists.
Where it sits in our coverage
Our consensus EUR/USD target for Mar26 is 1.1800 (median across 8 firms), with Morgan Stanley at the upper bound (1.2000) and BofA/Barclays at the lower (1.1700). Scotiabank's 1.1825 target aligns closely with the upper third of the consensus range, sharing proximity with JPMorgan and ING (both at 1.1800).
How firms align
Goldman Sachs, Deutsche Bank, and MUFG also target 1.1800 for Mar26, reinforcing the bullish tilt. However, Morgan Stanley stands out with a 1.2000 Mar26 target, above Scotiabank's level, while BofA and Barclays at 1.1700 suggest a more cautious view. The consensus median supports further upside, but the wide range (1.1700-1.2000) indicates disagreement.
What the data shows
Recent forecast revisions (May 5) show no changes in Mar26 targets across all firms, implying stability in near-term expectations. Our research /research/eurusd-consensus-divergence-may-2026 highlights that EUR/USD consensus at 1.22 for Dec26 while spot is 3.87% below, underscoring the potential for mean reversion.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Scotiabank targets 1.1825 on sentiment-driven rally; spot at 1.1500 implies further upside potential.
- 02Consensus Mar26 median at 1.1800 supports the move, but range (1.1700-1.2000) suggests resistance ahead.
- 03Momentum positioning and USD bearishness are key drivers; watch for resistance at 1.1825.
- 04Lack of fundamental catalyst increases risk of reversal if sentiment shifts.
Market implications
Focus on 1.1825 as near-term resistance; a break could open path to consensus targets near 1.2000. Watch for US data releases or Fed commentary that could shift USD sentiment. Our median Mar26 consensus at 1.1800 aligns with current rally, but any miss in data could trigger profit-taking.
Risks to this view
A sudden shift in USD sentiment (e.g., stronger US jobs data) could reverse the rally rapidly. Also, failure to break 1.1825 on first test may prompt longs to unwind, sending EUR/USD back toward 1.1500. A hawkish ECB surprise could also cap gains.
Sentiment by currency
USD-EUR+JPY~GBP~Composite USD score: -0.35
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.