EUR/USD continues to decline: Too many risks
The ongoing decline in EUR/USD is largely attributed to a myriad of risks that overshadow potential bullish sentiment for the Euro. Elevated concerns regarding geopolitical tensions and economic instability seem to anchor the Euro lower, favoring USD as a safe haven. As market participants weigh these risks against the diverging monetary policies of the Fed and ECB, the outlook for EUR/USD remains complicated. Current trading around 1.1446 further emphasizes the bearish sentiment, reflecting a challenging environment for Euro bulls.
Where it sits in our coverage
Our consensus EUR/USD target, set at 1.1700 (median across 11 firms), indicates a potential upside from current levels, with Morgan Stanley projecting the highest at 1.2000 while Lloyds stays cautious at 1.1331. While the bearish view from fxstreet aligns with certain firms, it presents a stark contrast to our consensus which anticipates a rebound over the upcoming months.
How firms align
Among the firms, RBC and Nomura align closely with the headline’s bearish sentiment, both targeting 1.1700 for March 2026. Conversely, firms such as Morgan Stanley maintain a more optimistic outlook, projecting a stronger rebound to 1.2000 in the same period, evident from our internal coverage reports.
What the data shows
Recent forecast revisions show a handful of adjustments, with BofA revising their March 2026 target down to 1.1700 while ANZ remains more favorable at 1.1609. This repositioning reflects the underlying concerns impacting market sentiment, which are explored in depth in our latest report at /research/eurusd-ecb-rate-path-2026-09-28.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD currently trades at 1.1446, showcasing significant bearish pressure.
- 02Watch for macro divergence as a key driver influencing the pair's direction.
- 03Increased geopolitical tensions may further intensify USD's safe-haven appeal.
- 04Firm projections show 1.1700 as a consensus target for EUR/USD in March 2026.
Market implications
Moving forward, key levels to monitor include the psychological threshold of 1.1400 for potential support. Additionally, upcoming ECB rate decisions will be pivotal, especially as they may challenge existing consensus targets near 1.1700.
Risks to this view
A shift in sentiment driven by unexpectedly positive economic data from the Eurozone could invalidate the current bearish outlook. Notable catalysts would include a surprise ECB rate hike or significant easing of geopolitical tensions that could bolster the Euro.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
Euro: EUR/USD bearish bias converging on support – Societe Generale
EUR/USD approaching technical support levels with established bearish momentum; traders should monitor break-below scenarios for acceleration targets.
Euro approaches yearly lows at 1.1324 against an unstoppable US Dollar
EUR/USD breaking toward yearly lows signals sustained USD strength; monitor if 1.13 becomes technical support or capitulation trigger.
EUR/USD: Lagarde's dovish tilt weighs on Euro – ING
Lagarde's dovish pivot signals ECB rate-cut cycle may begin sooner than priced, pressuring EUR/USD lower and reducing carry attractiveness.