EUR/USD Price Forecast: Flag breakdown supports more downside towards 1.1325
The EUR/USD pair continues its bearish trend following a breakdown of a flag pattern, signaling potential downside towards 1.1325. This technical development has placed the pair firmly under pressure, and traders are increasingly favoring short positions. The broader sentiment remains bullish on the USD and bearish on the EUR, which reinforces this downward trajectory. With current levels at 1.1434, traders should remain attentive to fresh data releases that could shape market expectations further.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1750 (median across firms), with Citi projecting a more bearish target of 1.1300 and Commerzbank offering an optimistic view at 1.1900. fxstreet's bearish outlook towards 1.1325 aligns closely with Citi's target and reflects the sentiment of the lower end of our range.
How firms align
Citi's target of 1.1300 by March 2026 is consistent with fxstreet's bearish analysis, indicating alignment in their views. Conversely, firms like Commerzbank and MUFG project much higher targets, indicating a split sentiment in the market. For further insights, refer to our reports on recent forecasts from these firms.
What the data shows
Recent forecast revisions have shown a notable shift, with Citi revising its target to 1.1300, suggesting they anticipate significant downward movement. Additionally, our research indicates that the EUR/USD is currently trading 2.85% below the December 2026 consensus of 1.1750, highlighting a potential disconnect between current pricing and expected fundamentals. See our insights in /research/eurusd-ecb-rate-path-2026-07-10.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Technical breakdown signals fresh downside targets, with support at 1.1325.
- 02Traders are increasingly leaning towards short positions in the EUR/USD.
- 03Watch for key data releases that might impact USD strength or EUR weakness.
Market implications
Traders should monitor the 1.1325 level closely as a potential tipping point for further downside. Upcoming economic indicators, especially from the U.S. that could strengthen the dollar, will be critical for market direction. Our consensus target of 1.1750 implies significant room for movement if bearish conditions persist.
Risks to this view
A reversal in this bearish outlook could occur if positive economic indicators emerge from the Eurozone, prompting a reassessment of growth expectations and inflation. A shift in sentiment from the ECB regarding interest rates could also invalidate current bearish forecasts.
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 weakens to near 1.1400 as US-Iran escalation boosts US Dollar
Geopolitical risk premium supporting USD as safe-haven flows accelerate; monitor for ECB response if volatility persists.
Euro: Range-bound rebound faces key resistance against US Dollar – Societe Generale
EUR/USD rebound capped by technical resistance suggests limited near-term upside for euro weakness trades.
Euro: Yield spreads hint at recovery against US Dollar – MUFG
Widening EUR/USD yield spreads in favor of eurozone assets suggests technical support for mean reversion; monitor if 10Y differential sustains above 100bp.