Euro: Downside risk toward key support against US Dollar – UOB
The recent sentiment from UOB highlights the increasing downside risk for the Euro against the US Dollar as it nears critical support levels. With the current EUR/USD spot at 1.1500, a break below these levels could trigger further selling pressure and reinforce bullish momentum for the USD. This scenario is further emphasized by our sentiment scoring, which presents a composite bullish outlook for the USD and bearish for the EUR. The market is on high alert as a decisive move could reshape trader positioning significantly.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1700 for Mar26, with expectations ranging between 1.1300 and 1.2000 across various firms. Goldman Sachs at 1.1800 represents the upper bound, while Citi's more cautious stance places the lower target at 1.1300.
How firms align
JPMorgan, Deutsche Bank, and MUFG share a bullish perspective near-term, with targets of 1.1800 for Mar26, aligning with the technical risks presented in UOB's view. Conversely, BofA’s target of 1.1700 sits just below consensus, suggesting a more tempered outlook amidst current volatility.
What the data shows
Recent research emphasizes the divergence in EUR/USD trading, suggesting it remains approximately 3% below the December 2026 consensus of 1.2000, indicating potential for further adjustments. See /research/eurusd-ecb-rate-path for more insight into these dynamics.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD nearing critical support at 1.1500, highlighting downside technical risks.
- 02A sustained break below current levels could trigger stop-loss orders.
- 03Watch for positioning shifts among market participants if USD strength continues.
- 04Potential for accelerated volatility if psychological barriers are crossed.
Market implications
The focus remains on the 1.1500 support level in the EUR/USD pair. Traders should monitor upcoming economic data releases, particularly from the U.S., as they could further influence the USD's strength and exacerbate moves in the Euro if support levels are breached.
Risks to this view
Any reversal in the current bearish sentiment towards the Euro could stem from unexpected positive economic data from the Eurozone, which might bolster confidence in the currency. A strong rebound above resistance levels could invalidate the current bearish outlook.
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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Bank desks on this topic
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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
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