Euro: Seen drifting toward 1.1400 against US Dollar – BBH
The Euro is currently facing downward pressure against the US Dollar, with analysts at BBH projecting a drift towards 1.1400. This aligns with current sentiment, which broadly favors the USD as bullish, while the EUR shows bearish tendencies. The technical breakdown suggests weakening support structures for the Euro, highlighting the increasing risk of further declines below key levels. As the market navigates these shifts, traders should closely monitor the Euro's performance against the Dollar for potential acceleration towards the target.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1717 (median across firms), with Bank of America at the lower bound of 1.1700 and CIBC at the upper bound of 1.1866. BBH's expectation for a decline toward 1.1400 in the near term starkly contrasts with the current consensus, indicating a potential misalignment in near-term positioning.
How firms align
While firms like ANZ (1.1400) and Standard Chartered (1.1400) are closely aligned with BBH's view, the majority of firms maintain more optimistic targets, with Bank of America, Barclays, and Nomura projecting 1.1700 for March. Notably, CIBC's target extends to 1.1866, indicating a bullish stance amidst current bearish sentiment.
What the data shows
Recent revisions from firms like UBS and Morgan Stanley reflect a broader upward bias, with targets reaching as high as 1.2000 for March. This is in direct contrast to BBH's view, suggesting market expectations may still favor a stronger Euro, as discussed in our report /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD could test the 1.1400 level in the near term as support weakens.
- 02Technical signals indicate a bearish outlook and potential for further decline.
- 03Monitor key support levels and broader market sentiment for potential reversals.
Market implications
Traders should keep an eye on the 1.1400 level, which serves as a crucial support. Key economic events, including upcoming ECB announcements, could act as catalysts that influence the Euro's trajectory against the Dollar in the coming weeks.
Risks to this view
A significant turnaround in economic data or unexpected monetary policy moves from the ECB could invalidate this bearish view, triggering a swift reversal in Euro strength. In particular, stronger-than-expected inflation data or a shift toward hawkish sentiment may bolster the Euro.
Sentiment by currency
USD+EUR-JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
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