EUR/USD holds supported as Dollar softens, central bank decisions loom
The Dollar has softened broadly as markets brace for a busy week of central bank decisions, with EUR/USD holding support near 1.1500. The composite sentiment score of -0.35 reflects USD bearishness, but the euro's gains remain tentative ahead of the ECB and Fed meetings. The headline captures the near-term positioning, but the real question is whether policy guidance can extend the bullish setup beyond the immediate reaction. Our consensus shows EUR/USD at 1.18 by March 2026, implying a 2.6% upside from current levels, but the wide firm-by-firm spread (1.17–1.20) underscores uncertainty about the path.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1800 (median across 8 firms) for March 2026, with Goldman Sachs and Deutsche Bank at the upper bound (1.18) and BofA and Barclays at the lower (1.17). The current spot at 1.1500 is 2.6% below consensus, suggesting a bullish tilt in the analyst community. Fxstreet.com's view aligns more closely with the upper third — Morgan Stanley's bullish 1.20 target and ING's 1.19 target share that framing.
How firms align
Morgan Stanley stands out as the most bullish among our tracked firms, targeting 1.20 for March 2026, which supports the headline's bullish EUR/USD bias. Goldman Sachs and Deutsche Bank, both at 1.18, also align with the constructive view. On the contrary, BofA and Barclays at 1.17 are the most cautious, reflecting a more tempered outlook that could be vindicated if the central banks disappoint. Our internal /reports/eurusd-consensus-divergence-may-2026 page details this divergence.
What the data shows
Our recent insight 'EUR/USD Consensus at 1.22 While Spot Sits 3.87% Below' highlighted a persistent gap between market consensus and spot, consistent with the current 2.6% discount. No firm has materially revised forecasts in recent weeks, but the range tightening around 1.18 suggests the market is awaiting central bank clarity before committing to a stronger move.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD supported at 1.1500 as USD softens before central bank decisions.
- 02Consensus targets 1.18 by Mar26, with a 1.17-1.20 range across firms.
- 03ECB and Fed guidance this week will be key to sustaining bullish momentum.
- 04Morgan Stanley's 1.20 target is the most bullish; BofA's 1.17 is most cautious.
Market implications
Watch the ECB decision on Thursday and Fed meeting next week for guidance on rate paths. A dovish ECB could cap EUR/USD near 1.16, while a hawkish hold may push it toward our consensus 1.18. The 1.1500 level is key support; a break below would invalidate the bullish setup.
Risks to this view
A stronger-than-expected USD from hawkish Fed rhetoric or safe-haven flows would reverse the bullish EUR/USD view. If the ECB signals concern about growth, the euro could weaken, testing support at 1.14. The wide dispersion in firm targets (1.17–1.20) reflects this uncertainty; a decisive move below 1.1500 would force a reassessment.
Sentiment by currency
USD-EUR+JPY~GBP~Composite USD score: -0.35
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD strengthens as mixed US labor data and hopes for a US-Iran deal pressure the Greenback.
Soft US labor print reduces Fed rate-hike conviction; geopolitical risk-off from Iran talks risk-off flows weaken USD safe-haven demand.
EUR/USD: Recovery eyes full retracement – Scotiabank
EUR/USD recovery momentum suggests technicians are positioning for mean reversion toward recent highs, indicating potential USD weakness into resistance.
EUR/USD: Binary path around Gulf deal – ING
EUR/USD: Oil shock, real rates and conflict risks – Commerzbank
Oil shock transmission via real rates and geopolitical premium widens USD carry advantage; EUR structural support erodes as terminal rates diverge.
Cross-firm research
EUR/USD Trades 3.87% Below Consensus: What the Gap Reveals
EUR/USD spot at 1.1727 sits 3.87% below the eight-firm median Dec-26 target of 1.22, exposing a structural divergence that demands explanation.
EUR/USD Consensus at 1.22 While Spot Sits 3.87% Below
Eight sell-side firms hold a median Dec-26 target of 1.22 for EUR/USD while spot trades at 1.1727, a gap that demands explanation.