Euro: Downside risk capped by 1.1500 against US Dollar – UOB
UOB's latest assessment suggests that the downside risk for the euro is limited around the 1.1500 level against the US dollar. Currently trading at 1.1679, the euro reflects a robust consensus outlook with expectations for further appreciation in the medium term. Analysts are cautious but see the recent pullback as a potential buying opportunity, especially as the broader macroeconomic landscape supports euro strength. This perspective underscores the ongoing uncertainty in dollar dynamics and aligns with our internal forecasts showing a median target considerably above the current spot.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1717 (median across firms), with Commerzbank at the upper bound (1.1900) and Wells Fargo at the lower (1.1200). UOB's view on cap risk around 1.1500 suggests a more conservative outlook when compared to the widespread expectation of gradual euro appreciation across our coverage.
How firms align
Commerzbank and Barclays both project targets above the current spot, with Commerzbank forecasting 1.1900 by March 2026. Conversely, Credit Agricole and Wells Fargo present a more bearish stance, with lower targets under 1.1600. This divergence indicates a split in sentiment on euro strength versus the dollar's capabilities moving forward.
What the data shows
Recent revisions from firms like Deutsche Bank, revisiting their € targets, highlight increased optimism, suggesting levels around 1.1800 and even 1.2000 by March 2026. Our research note '/research/eurusd-ecb-rate-path' reflects on EUR/USD trading significantly below the Dec-26 consensus of 1.20, which adds context to current pricing dynamics.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD currently at 1.1679; UOB sees 1.1500 as key downside support.
- 02Analysts view potential for euro upside despite short-term weakness.
- 03Consensus targets indicate a medium-term bullish outlook, peaking at 1.2000.
- 04Bearish targets from some firms reflect broader uncertainty in dollar strength.
Market implications
Look for key resistance around 1.1700 in the near term. Upcoming ECB announcements could shift sentiment, especially with our consensus target sitting at 1.1717. Positioning around this level will be crucial in the coming weeks.
Risks to this view
A significant shift in U.S. economic indicators or unexpectedly hawkish Fed sentiment could undermine euro strength and prompt a move below 1.1500. Additionally, geopolitical developments in Europe could also pose challenges to the euro's resilience.
Sentiment by currency
USD+EUR-JPY~GBP~Composite USD score: +0.35
Sources & References
How we cover this story
Other coverage on this pair
Euro holds steady against the US Dollar as markets await clarity on a possible US-Iran peace deal
EUR/USD Price Forecast: Bulls struggle to breach a previous support near 1.1600
Failure to break 1.1600 resistance suggests EUR/USD consolidation range; watch for breakout direction as technical support holds.
Euro: Seen drifting toward 1.1400 against US Dollar – BBH
EUR/USD technical breakdown toward 1.1400 signals weakening support structure; FX desks should monitor for acceleration below key level.
Germany's final Harmonized Index of Consumer Prices for May remains at 2.7% YoY: What it means for EUR/USD?
Bank desks on this topic
Kevin Warsh navigates a hawkish Fed shift
Articles Kevin Warsh navigates a hawkish Fed shift 15:12 FX Rates United States Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Improved economic momentum and elevated inflation suggest the Federal Reserve will acknowledge the possibility of future ra
FX Daily: War is over – maybe
Articles FX Daily: War is over – maybe 08:02 FX Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download “We ended the war with Iran today,” said President Trump yesterday evening. Brent crude fell 4% on the news, while short-dated US yields and the dollar fel
ING Monthly: Already playing into extra time
Articles ING Monthly: Already playing into extra time 11:00 Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Traditionally, the World Cup may have offered a welcome reprieve from global uncertainty and heavy headlines. Still, there are moments when eve
FX: Cyclical dollar bullishness takes over
Articles FX: Cyclical dollar bullishness takes over 10:33 FX Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download After much discussion about a structural decline in the dollar last year, investor sentiment is now swinging towards a cyclical dollar rally.