EUR/USD outlook: Bears eye psychological 1.10 support, consolidation may precede attack
The EUR/USD is currently facing pressure below the 1.1050 level, suggesting a potential consolidation phase that could precede a test of the critical psychological support at 1.10. Bears are keenly eyeing this level as a signal for deeper USD strength, especially given the prevailing bearish sentiment around the euro. With recent forecasts indicating significant divergence from current spot rates, this context becomes increasingly critical for traders to navigate potential volatility ahead.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1634 (median across 12 firms), with CIBC at the upper bound (1.2200) and TMG at the lower (1.1447). The broader market sentiment appears to diverge substantially from this consensus, particularly when looking at potential future movements.
How firms align
Several firms are positioning contrary to the bearish narrative, with BofA forecasting 1.1500 for Mar26, reflecting a less aggressive stance. Conversely, Rabobank anticipates a bounce towards 1.1759 by March 2026, supporting a more optimistic outlook in line with our longer-term consensus. Their projections can be referenced in our internal reports on firm targets.
What the data shows
Recent revisions have shown Mizuho adjusting their projections to 1.1500 for March 2026, while other firms like Nomura maintain targets around 1.1700. For a more in-depth analysis on this divergence, see our piece at /research/eurusd-ecb-rate-path-2026-10-07.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD struggles to maintain levels above 1.1050, signaling caution.
- 02Bears eye 1.10, where a significant test could imply deeper USD strength.
- 03Watch for any breach of 1.1000 as a signal of intensified selling pressure.
Market implications
Investors should monitor the 1.10 level closely as a potential tipping point for further bearish sentiment. Upcoming economic data releases and ECB signals may also impact positioning, particularly as our consensus remains well above current spot levels.
Risks to this view
A reversal in this bearish outlook could occur if the EUR shows strength above the psychological 1.10 support or if we see unexpected dovish guidance from the Fed, which may shift the USD's appeal.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.60
Sources & References
How we cover this story
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