EUR/USD Price Forecast: Resumes decline after testing Bearish Flag breakdown
The EUR/USD pair is resuming its decline following a rejection at the Bearish Flag breakdown, indicating a potential technical capitulation that traders should be wary of. With the current sentiment scored as bearish for the Euro and bullish for the Dollar, the failure to hold above key support at the 1.08 level could lead to fresh lows. This technical backdrop suggests a looming risk of further downside, which may catch traders off-guard amid previously bullish consensus forecasts for the Euro.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across 11 firms), with Deutsche Bank at the upper bound (1.2500) and BofA at the lower (1.1240). [PUBLISHER]’s view aligns more closely with the upper half — Goldman and Nomura share a more bullish take, predicting rates around 1.1800 for March 2026.
How firms align
Goldman Sachs is notably optimistic, marking a target of 1.1800 for March 2026, supporting a bullish view in contrast to the negative momentum noted in the breakdown. Conversely, BofA holds a more bearish position at 1.1700, indicating potential divergence from prevailing trends, as detailed in /research/eurusd-ecb-rate-path-2026-07-26.
What the data shows
Recent adjustments indicate a tightening range, with BofA revising its March target to 1.1700, while firms like Commerzbank remain bullish at 1.1900. This mixed sentiment will be crucial as market dynamics and rate expectations evolve.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD faces downside risk with support at 1.08 crucial to monitor.
- 02Bearish flag breakdown may signal deeper weakness ahead.
- 03Aggressive dollar buying could lead to fresh lows if 1.08 fails.
- 04Firms show mixed targets, indicating market uncertainty.
Market implications
Watch for the 1.08 support level; a breakdown here opens the door to a move towards the 1.05 mark. Upcoming economic data releases, particularly Eurozone inflation figures, will highlight shifts in sentiment against our consensus of 1.1700 for March 2026.
Risks to this view
A stronger than expected Eurozone economic data release or an unexpected shift in ECB policy could invalidate this bearish view, pushing EUR/USD back above the critical 1.10 resistance level.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
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