Euro: Downtrend versus US Dollar intact with key 1.1600 level – UOB
The euro remains under pressure against the US dollar, as highlighted by UOB's assertion that the downtrend is firmly intact with a critical support level at 1.1600. Currently trading at 1.1500, this level is critical for any potential reversal; a break below could further strengthen bullish sentiment towards the USD. Given the market's consensus leaning towards continued dollar strength, the situation signifies broader challenges for the euro amid potential economic volatility in the eurozone.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700 (median across firms), with the upper range marked by Goldman at 1.1800 and the lower end represented by Citi at 1.1300. UOB's view aligns with the bearish sentiment prevailing in the market as they highlight 1.1600 as a pivotal support level for the euro against the USD.
How firms align
JPMorgan and MUFG show bearish positioning on the euro as their targets for March 2026 match closely with UOB's bearish sentiment, both forecasting levels around 1.1800. In contrast, Morgan Stanley’s March 2026 target at 1.2000 deviates from this outlook, suggesting a more optimistic view on the euro's potential recovery.
What the data shows
Recent revisions reveal that many firms are adjusting their outlooks to position for dollar strength, with Deutsche Bank and Goldman both raising their March 2026 targets to 1.1800 and 1.1800, respectively, indicating diverging sentiments in the market. Notably, our published research shows that EUR/USD trades approximately 3.84% below the December 2026 consensus, demonstrating a significant bearish divergence for the pair.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD remains under pressure with current spot at 1.1500.
- 02Watch for breaks below 1.1600 to confirm USD strength.
- 03Forecasts indicate broad consensus for continued dollar dominance.
- 04Key resistance at 1.1800 could trigger short-term reversals.
Market implications
Market participants should closely monitor the 1.1600 support level in EUR/USD for signs of USD resilience. Upcoming economic data releases could further inform positioning ahead of consensus shifts, as our target remains at 1.1700.
Risks to this view
Any unexpected positive economic data from the eurozone, particularly concerning inflation or growth metrics, could challenge the current bearish stance. A significant breach above 1.1800 could signal a broader shift in sentiment towards 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
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.