EUR/USD: Foreign inflows support upside potential – ING
ING argues that foreign inflows into euro-denominated assets provide technical support for EUR/USD, sustaining upside potential despite spot trading near 1.15, well below consensus targets. The desk frames flow persistence as a proxy for structural demand shifts, suggesting the current rally may have legs beyond short-term positioning. This view aligns with the broader bullish consensus (median 1.18 for Mar26) but comes as spot trades 3.87% below that level, per our recent research on consensus divergence. For traders, the key question is whether inflows can offset headwinds from ECB policy divergence or global risk sentiment.
Where it sits in our coverage
Our consensus EUR/USD target for Mar26 sits at 1.1800 (median across 8 firms), with Morgan Stanley at the upper bound (1.2000) and BofA/Barclays at the lower (1.1700). ING's own target is 1.1900 for Mar26, placing it in the upper third of the range alongside JPMorgan and Goldman (both 1.1800). The headline's bullish framing aligns closely with the median view, though spot at 1.1500 implies significant catch-up potential if inflows persist.
How firms align
ING's view is supported by firms at the upper end: Morgan Stanley targets 1.2000 for Mar26, while Goldman and Deutsche Bank see further upside to 1.2500 by Dec26. In contrast, BofA and Barclays are the most conservative (1.1700 for Mar26), suggesting that flow persistence would need to be substantial to shift their bearish bias. The divergence between Morgan Stanley's Dec26 target (1.1600) and peers (e.g., Goldman 1.2500) highlights uncertainty around structural demand.
What the data shows
Our recent insight '/research/eurusd-consensus-divergence-may-2026' underscores that EUR/USD spot sits 3.87% below the Dec26 consensus of 1.2200, reinforcing the asymmetric upside case if inflows materialize. Forecast revisions have been modest, but ING's flow-based argument adds a tactical catalyst beyond standard macro models.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Foreign inflows into euro assets could propel EUR/USD from 1.1500 toward consensus 1.1800 Mar26 target.
- 02ING sees flow persistence as a signal of structural demand – monitor weekly TIC data and option gamma.
- 03Upside capped near 1.2000 (upper bound) unless risk appetite or ECB narrative shifts; Morgan Stanley and Goldman offer divergent Dec26 paths.
- 04Consensus divergence at Dec26 (1.1600–1.2500) underscores model uncertainty; flow catalysts may resolve the range.
Market implications
Watch for sustained foreign buying in European equity and bond markets as a leading indicator. The next catalyst is the ECB meeting on March 12 – if Lagarde leans hawkish, EUR/USD could test the 1.1800 consensus mid-point. A break above 1.1700 resistance would open the door to the 1.18-1.20 range.
Risks to this view
If foreign inflows fail to persist or reverse due to a risk-off shock (e.g., US tariff escalation, Eurozone growth disappointment), EUR/USD could slide back toward 1.1300. A dovish ECB pivot would also invalidate the bullish thesis, aligning with BofA/Barclays' Mar26 targets of 1.1700.
Sentiment by currency
USD-EUR+JPY~GBP~Composite USD score: -0.55
Sources & References
How we cover this story
Other coverage on this pair
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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.