EUR/USD: Downtrend resumes with stable forecasts – Danske Bank
Danske Bank has reaffirmed its bearish EUR/USD outlook, stating that the downtrend resumes with stable forecasts. This institutional view underscores persistent euro weakness despite recent consolidation, aligning with the broader structural narrative of divergence between a resilient USD and a struggling eurozone economy. The call is notable for its lack of revision to existing targets, suggesting Danske sees limited upside catalysts for the single currency through year-end. For traders, this reinforces the prevailing bearish consensus but also highlights the risk that short positions may be crowded, especially with spot trading 3.87% below our median consensus of 1.18 for March 2026.
Where it sits in our coverage
Our consensus EUR/USD target for March 2026 is 1.1800 (median across 8 firms), with Morgan Stanley at the upper bound (1.2000) and BofA and Barclays at the lower bound (1.1700). The current spot at 1.1500 sits well below even the most bearish firm targets, suggesting considerable upside potential according to the consensus. Danske Bank's view, while not explicitly quantified in the excerpt, aligns more closely with the lower third of our panel — firms like BofA and Barclays, who see limited near-term euro recovery.
How firms align
Danske's bearish stance finds common ground with BofA's 1.1700 March target and Barclays' similar level, both of which project only modest euro appreciation from current levels. In contrast, Morgan Stanley's bullish 1.2000 target represents the most extreme outlier, implying a 4.3% rally that seems at odds with the resumed downtrend narrative. JPMorgan, Goldman, and Deutsche Bank cluster around 1.1800, offering a more cautious upside view consistent with stable forecasts.
What the data shows
Our March 2026 consensus range of 1.1700–1.2000 reveals a relatively narrow dispersion among firms, indicating broad agreement that euro weakness is a medium-term theme. However, the April 2026 consensus divergence (1.1800 spot vs 1.2200 consensus) highlighted in our recent /research/eurusd-consensus-divergence-may-2026 suggests the market may be underestimating the pace of convergence.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Danske reaffirms EUR/USD downtrend; spot at 1.1500 is 3.87% below March consensus of 1.1800.
- 02Consensus range 1.1700–1.2000: BofA and Barclays most bearish; Morgan Stanley most bullish.
- 03Short positioning may be crowded; risk of squeeze if US data disappoints.
- 04Eurozone growth differential remains key catalyst for further euro downside.
Market implications
Watch for Fed commentary and US payrolls data to validate the dollar strength narrative; a break below 1.1450 could accelerate selling pressure toward the 1.1300 area. Our median consensus of 1.1800 for March 2026 suggests potential for a 2.6% rally from current levels if the euro economy shows signs of stabilization.
Risks to this view
A sharp deterioration in US economic data or a dovish Fed pivot could invalidate the bearish EUR/USD view, triggering short covering. Additionally, a decisive break above 1.1700 resistance would challenge the resumption of the downtrend and signal a potential shift in positioning.
Sentiment by currency
USD+EUR-JPY~GBP~Composite USD score: +0.60
Sources & References
How we cover this story
Other coverage on this pair
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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.