Euro: Consolidation versus US Dollar as downside momentum eases – UOB
The Euro is currently seeing a stabilization phase against the US Dollar, as indicated by easing downside momentum. This shift suggests that the market may be recalibrating expectations after a prolonged period of weakness influenced by economic divergences between the Eurozone and the U.S. The current spot price of 1.1500 highlights a significant disparity from the consensus forecast, where projections cluster near 1.20, reflecting optimism in Euro appreciation over the coming months.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1700 for March 2026, with a range from 1.1300 at Citi to 1.2500 at Goldman. The stabilizing view on the Euro aligns with the upper half of forecasts, notably by firms like JPMorgan and Goldman, who have confidence in reaching targets above the current spot levels.
How firms align
Firms such as JPMorgan and Goldman are positioned positively towards the Euro, forecasting 1.1800 and 1.1800 respectively for March 2026. In contrast, Citi presents a more bearish outlook at 1.1300 for the same timeframe, indicating a divergence in sentiment among analysts. [PUBLISHER]'s perspective fits well with the bullish stances taken by these aligned firms.
What the data shows
Recent revisions have shown ING adjusting their EUR forecast upwards to 1.1900 for March 2026, which is indicative of shifting sentiment toward the Euro. This aligns with our prior insights which highlighted a substantial disconnect between current spot rates and long-term consensus targets, as recorded in our investigations /research/eurusd-consensus-divergence-may-2026-20260522-0604.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Euro consolidating at 1.1500 as sentiment slowly shifts.
- 02Watch for EUR/USD patterns; the floor appears to be establishing at current levels.
- 03Key resistance level to monitor: 1.1700 — alignment with March consensus.
- 04Increased bearish sentiment from Citi signals potential short-side interest.
Market implications
Looking ahead, traders should keep an eye on the critical level of 1.1700, which marks our consensus target for March. Economic data releases from the Eurozone could act as catalysts for further strengthening or weakness against the Dollar, potentially reshaping expectations around upcoming ECB policy decisions.
Risks to this view
A resurgence of US dollar strength, particularly if inflation data or economic indicators surprise to the upside, could invalidate the current bullish outlook on the Euro. Additionally, geopolitical tensions in Europe could spark renewed volatility that pushes EUR/USD further from consensus projections.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
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.