Euro: Downside risks within range against US Dollar – UOB
UOB's recent analysis flags downside risks for the Euro against the US Dollar, suggesting a level of caution for traders. With EUR/USD currently at 1.1500, their view implies that resistance levels may provide a suitable opportunity for shorts as the pair appears bound within a range. This assessment is timely given the recent divergence found in our prior research, indicating that current market conditions could favor the USD amid potential ECB policy navigation.
Where it sits in our coverage
Our consensus target for EUR/USD currently stands at 1.1700 for March 2026 (median across firms), with Goldman at the upper bound of 1.1800 and Citi at the lower bound of 1.1300. UOB's appraisal of downside risks aligns closely with the sentiment echoed by some of these major firms, emphasizing caution against potential resistance levels in the current trading range.
How firms align
Firms like JPMorgan and MUFG set their March 2026 targets at 1.1800, reinforcing the possibility of further fluctuations within the upper range. Conversely, BofA's projection of 1.1700 reflects a more conservative stance, suggesting hesitancy about sustained Euro strength in light of current economic challenges. [See our full analysis for JPMorgan in /research/jpmorgan].
What the data shows
Recent insights point out that EUR/USD is presently trading 3% below the December 2026 consensus of 1.20, which indicates that the Euro's valuation may still be adjusting to market realities. For more details, refer to /research/eurusd-ecb-rate-path for additional context on this divergence.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01UOB’s analysis indicates potential short opportunities against EUR/USD near resistance.
- 02Traders should monitor key resistance levels closely, particularly around 1.1500.
- 03Any ECB announcements could catalyze moves in the Euro, with a key watch at 1.1700 for March.
- 04Market sentiment leaning bearish on the Euro heightens focus on USD strength.
Market implications
Investors should keep a close eye on resistance at the 1.1500 level in the coming sessions, as this may dictate the Euro's trajectory ahead of major economic data releases. The consensus target of 1.1700 for March offers a significant threshold for assessing future performance against the Dollar.
Risks to this view
A shift in ECB policy, particularly in the direction of more hawkish stances on interest rates, could invalidate the current bearish view. Such a pivot could see EUR/USD swiftly elevate past resistance levels and complicate short positions.
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 slips against the US Dollar as upbeat US economic data reinforces hawkish Fed bets
Strong US data firming Fed hawkish repricing widens USD/EUR rate differential, pressuring euro from both policy divergence and growth momentum.
EUR/USD Price Forecast: Tests 1.1600 amid flaring geopolitical tensions, higher Oil prices
Geopolitical risk premium and oil strength typically support EUR/USD upside as energy importer dynamics shift; monitor if Fed policy divergence accelerates the move.
Eurozone and Germany Composite PMIs revised higher: Here's what it means for EUR/USD
Upward PMI revisions signal stronger-than-expected eurozone activity, supporting ECB hawkish bias and EUR/USD upside.
Euro stalls as Oil shock keeps the US Dollar in play
Oil price volatility sustaining safe-haven USD demand while offsetting hawkish ECB factors, pressuring EUR/USD momentum.
Bank desks on this topic
Dollar faces renewed strength if US-Iran talks fail, MUFG warns
MUFG analysts warn the dollar could strengthen further if US-Iran talks collapse, with energy-driven inflation risks potentially pushing Fed officials toward a more hawkish stance and lifting US yields. - The US dollar faces renewed upward pressure if Washington and Tehran fail t
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