Euro: Downside bias but key support holds against US Dollar – UOB
The Euro continues to exhibit a downside bias against the US Dollar, despite maintaining critical technical support levels. While UOB notes this interplay, their perspective suggests that the euro could consolidate in a range rather than embark on a stronger directional move. This is particularly pertinent as the market assesses the broader economic indicators that could influence currency valuations in the near term.
Where it sits in our coverage
Our consensus EUR/USD target is currently 1.1750, with a median spread across forecasts suggesting a range from 1.1000 (Citi) to 1.2200 (Commerzbank). UOB's view aligns closely with the lower range, indicating a bearish outlook in the near term as they maintain support levels as a focal point.
How firms align
Several firms express varied expectations for the Euro's trajectory, with Goldman and Deutsche Bank forecasting a more bullish Mar26 target of 1.1800. Conversely, Citi and HSBC are more cautious, setting targets around 1.1300 and 1.1700, respectively, indicating a split in sentiment within our coverage. See our reports for deeper insights: /reports/goldman and /reports/citi.
What the data shows
Recent revisions signal a more dovish sentiment, particularly from Goldman, who adjusted their March target to 1.1800. The currency may trade 2.85% below our consensus forecast, reflecting market apprehensions as seen in our research at /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD remains technically supported at 1.1400 despite bearish sentiment.
- 02Key levels to watch: 1.1434 for immediate resistance.
- 03March target revisions imply traders should brace for range-bound activity.
- 04Market faces potential shifts with upcoming economic data releases.
Market implications
Traders should closely monitor the 1.1400 support level while watching for any influential economic data that could impact Euro stability. Our consensus remains at 1.1750 through December, suggesting limited upside in the near term.
Risks to this view
A break below 1.1400 could invalidate the current support narrative, especially if macroeconomic indicators shift unexpectedly or if the ECB signals a more aggressive tightening bias. Observing Fed policy moves will also be crucial.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.55
Sources & References
How we cover this story
Other coverage on this pair
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