EUR/USD near two-week low: Dollar regains favour with markets
The EUR/USD pair is nearing a two-week low as the dollar continues to regain favor in the markets, driven by a notable shift in risk appetite that favors the greenback. This represents a potential pivotal moment for the euro, which is facing bearish sentiment amidst growing challenges to its stability. Recent trends suggest traders should closely monitor the key support level around 1.08 for any break that could confirm ongoing dollar strength.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1700 (median across firms), with UBS at the upper bound (1.2000) and Danske Bank at the lower end (1.1100). This positions the EUR/USD sentiment against the more bearish outlook highlighted in the headline, emphasizing the pressure the euro is under amid a stronger dollar.
How firms align
Morgan Stanley and ING both maintain higher targets of 1.2000 and 1.1700 for March 2026 respectively, reflecting a more optimistic view on the euro's performance. In contrast, firms like UOB have forecasted lower targets, suggesting varied perspectives on the euro's bullish potential versus the bearish context framed by fxstreet.com.
What the data shows
Recent revisions from firms indicate slight downward adjustments in euro expectations, with Morgan Stanley recently reducing its forecast to 1.2000 for March 2026, and ING also lowering its outlook. For a deeper look at these forecasts, see our published research at /research/eurusd-ecb-rate-path-2026-08-30.
How firms align with this view
Aligned with the headline view
Key takeaways
- 01EUR/USD approaching critical support at 1.08; watch for a possible breakdown.
- 02Dollar strength is a key theme, with risk appetite shifting in its favor.
- 03Monitor this week's economic releases, particularly any notable data from the US.
- 04Lower revisions by firms indicate bearish sentiment on EUR persists.
Market implications
Going forward, traders should watch the 1.08 support level closely; a breakdown here could validate bearish positions. Key economic events, particularly around USD indicators, could further influence this dynamic as markets digest upcoming releases.
Risks to this view
The view will be invalidated if significant economic data out of Europe surprises positively, or if US economic indicators point to a weakening dollar. A shift in central bank tone from the ECB in favor of tightening could also alter the outlook for EUR/USD.
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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