Euro trims losses against the US Dollar, but Fed rate-hike bets keep gains in check.
The Euro managed to recover some ground against the US Dollar, currently sitting at 1.1700, as sentiment on the single currency remains neutral. However, robust expectations for further rate hikes from the Federal Reserve are keeping a lid on potential gains, indicating ongoing USD strength linked to divergent monetary policy paths. The struggle between short-term recovery in the euro and the pressure from Fed rate outlooks underscores the complexity for traders focused on EUR/USD.
Where it sits in our coverage
Our current consensus EUR/USD target is 1.1700, with a range from 1.1200 to 1.2000 reflected across various firms. Notably, UBS holds the most optimistic outlook at 1.2000 for March 2026, while Scotiabank presents a more cautious view of 1.1200 at the same horizon.
How firms align
JPMorgan and Goldman Sachs align with the bullish outlook towards a EUR/USD target of 1.1800 by March 2026, positioning them well above the consensus median. For additional details, reference our internal reports on these firms at /reports/jpmorgan and /reports/goldman.
What the data shows
Recent forecast revisions have seen Goldman revise its March target to 1.1800, while Scotiabank’s recent update has presented a more bullish 1.1734 target. Additionally, insights from our published research, such as /research/eurusd-ecb-rate-path, highlight the ongoing divergence of policy as weighing heavily on the euro's performance.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD is resolved at 1.1700, with ongoing USD strength stemming from Fed rate hike expectations.
- 02Watch for volatility as traders navigate the divergence of monetary policies.
- 03Bullish consensus targets remain at 1.1800 for EUR/USD, against a backdrop of unwinded positions.
- 04Scotiabank's 1.2200 target suggests potential upside if conditions shift.
Market implications
Upcoming key economic data, particularly US inflation reports, may influence Fed policy outlook and hence the EUR/USD dynamics. Watch the 1.1750 resistance level closely, as a breakout could signal a stronger euro sentiment amidst persistent Fed rate expectations.
Risks to this view
A stronger than expected labor market report or inflation print could derail the EUR's uptrend by reinforcing Fed rate hike bets, creating downward pressure on the Euro. Furthermore, geopolitical developments in Europe could exacerbate current trends.
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: Resistance at 1.1450 caps upside against US Dollar – Scotiabank
EUR/USD facing technical resistance at 1.1450 suggests limited upside for euro shorts until level breaks.
EUR/USD Price Forecast: Looks to extend intraday descent below 1.1400 on firmer USD
Technical breakdown below 1.1400 signals USD strength; watch for continuation toward next support levels on technical invalidation of higher lows.
Euro: Political and growth risks point lower against US Dollar – HSBC
HSBC identifies structural euro weakness from political and growth headwinds, supporting USD strength in medium term.
Euro: Range trading likely to persist against US Dollar – Scotiabank
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