Euro: Recovery against US Dollar targets key Fib level – Scotiabank
EUR/USD has extended its recovery from recent lows, with Scotiabank highlighting that the pair is now targeting a key Fibonacci retracement level around 1.1570. The move is driven by technical momentum rather than a clear fundamental catalyst, as the dollar softens on mixed US data. Scotiabank's tactical long positioning aligns with the broader consensus that the euro is undervalued, but the absence of a fresh catalyst leaves the recovery vulnerable. For traders, the key test is whether EUR/USD can sustain a break above 1.1570, which would open the door toward 1.1700.
Where it sits in our coverage
Our consensus EUR/USD target for Mar26 sits at 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 view aligns more closely with the upper third — Morgan Stanley and ING share that aggressive bullish framing, while BofA and Barclays are more cautious.
How firms align
Morgan Stanley stands out with a Mar26 target of 1.2000, the most bullish among our tracked firms, while ING expects 1.1900. Both are slightly above the median and align with Scotiabank's constructive bias. On the contrary, BofA and Barclays target 1.1700, placing them at the low end and more skeptical of the recovery's staying power.
What the data shows
Recent forecast revisions across all eight firms on May 5 show no major changes, with the median Mar26 target holding at 1.1800. Our published research highlights that spot remains ~3.7% below the Dec26 consensus of 1.2200, suggesting lingering undervaluation but also risk of downside surprises if the recovery falters.
Key takeaways
- 01EUR/USD technical recovery targets key Fib level at 1.1570; break above opens path to 1.1700.
- 02Short-term bullish momentum lacks fundamental catalyst; tactically long but cautious on duration.
- 03Consensus Mar26 median 1.1800 implies ~2.6% upside from current 1.1500, but divergence in firm views signals uncertainty.
- 04Risk of reversal if USD rebounds on hawkish Fed commentary or eurozone data disappoints.
Market implications
Watch for EUR/USD sustained close above 1.1570 for confirmation of bullish momentum. Key event risk: US CPI release next week and ECB speakers. If spot fails to hold above 1.1500, the short-term bias turns neutral. Our consensus Mar26 target of 1.1800 remains achievable but hinges on a broader USD weak.
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: Limited downside against US Dollar with ECB hike message – MUFG
ECB's continued hike messaging supports EUR/USD floor around current levels; limited downside signals reduced momentum for USD longs.
Euro: Gains capped against US Dollar by Fed story – ING
Fed rate expectations remain supportive of USD strength, structurally limiting EUR/USD upside despite recent euro resilience.
EUR/USD Price Forecast: 20-day EMA remains key barrier as Iran uncertainty persists
Euro slips as Hormuz firefight revives US Dollar demand
Geopolitical risk in Persian Gulf elevates safe-haven demand, likely to support USD/JPY parity and cap EUR/USD downside until tensions clarify.
Bank desks on this topic
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
EUR/USD was hit in March on expectations that the stagflationary shock from Iran would resonate more in Europe than the US. The inflationary effects have been plain for all to see, but this week's release of European PMIs warns that the stagnationary effect is just starting to la
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? - eFXdata
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? eFXdata
Cross-firm research
EUR/USD Trades 3.16% Below Dec-26 Consensus as 18 Firms Hold 1.20 Median
With spot at 1.1621 and the 18-firm median Dec-26 target at 1.20, EUR/USD sits 3.16% below consensus—a gap that demands explanation.
EUR/USD Trades 3.2% Below Dec-26 Consensus as Targets Cluster Near 1.20
Spot at 1.1612 sits 3.2% below the 18-firm median Dec-26 target of 1.20, exposing a consensus that remains structurally bullish EUR despite the pair's failure to close the gap.
EUR/USD Trades 4% Below Dec-26 Consensus: What the Gap Reveals
EUR/USD spot at 1.1711 sits 4.01% below the eight-firm median Dec-26 target of 1.22, exposing a structural tension between macro conviction and current tape.