EUR/USD: PMI signals and softer pair – Danske Bank
The eurozone PMI data came in softer than expected, reinforcing the bearish bias for EUR/USD. Danske Bank flags that the weaker data reduces the case for a hawkish repricing by the ECB, adding to near-term downside pressure on the pair. With spot at 1.1500, well below the consensus median across 8 firms, the market is pricing in a deeper slowdown than most forecasters anticipate. This divergence between spot and consensus targets suggests either a catch-up rally or further downside if data continues to deteriorate. The alignment of PMIs with the ECB's dovish tilt makes EUR/USD vulnerable to further losses in the short term.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1800 for Mar26 (median across 8 firms), with Goldman (1.1800) and Barclays (1.1700) at the lower end. The current spot at 1.1500 is 2.5% below the nearest Mar26 target, highlighting a substantial gap. Danske's bearish view aligns more closely with firms like BofA (1.1700) and Barclays (1.1700), which are already below the consensus median.
How firms align
Danske's view is supported by BofA (Mar26 target 1.1700) and Barclays (Mar26 1.1700), both of which are among the most bearish in our coverage. On the other hand, Morgan Stanley's Mar26 target of 1.2000 is the most bullish, implying a significant rebound. The divergence between these firm-level targets (range 1.1700–1.2000 for Mar26) reflects uncertainty about the pace of recovery.
What the data shows
Our recent research /research/eurusd-consensus-divergence-may-2026 highlights that EUR/USD consensus at 1.22 for Dec26 sits 3.87% above spot, suggesting the median view is for a gradual recovery. However, the PMI data challenges that narrative and may prompt downward revisions if the trend persists.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Softer eurozone PMIs reduce ECB hawkish repricing conviction, pressuring EUR/USD.
- 02Spot at 1.1500 is 2.5% below the most bearish Mar26 consensus target of 1.1700.
- 03Near-term technicals remain weak; key support at 1.1450 if PMI trend continues.
- 04Divergence between bearish firms (BofA, Barclays) and bullish (MS) keeps range wide.
Market implications
Watch for further EUR/USD downside towards the 1.1450 level if next week's eurozone services PMI disappoints. A break below 1.1500 could accelerate selling towards the 1.1400 area. Our consensus Mar26 target of 1.1800 is now at risk of being revised lower if data momentum fails to improve.
Risks to this view
A hawkish surprise from the ECB or a strong rebound in eurozone hard data (e.g., industrial production) would invalidate the bearish view. Additionally, a sharp improvement in risk sentiment or a weaker USD could lift EUR/USD back above 1.1600, challenging the downside bias.
Sentiment by currency
USD+EUR-JPY~GBP~Composite USD score: +0.65
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.