EUR/USD Price Forecast: Hawkish ECB prospects support Euro
Recent hawkish expectations from the ECB are driving a bullish sentiment for the euro, contributing to the current strength of EUR/USD, which is trading at 1.1419. This policy divergence between the ECB and the Fed is tightening the rate differential, benefitting the euro versus the dollar. The market appears to be pricing in a higher probability of further ECB rate hikes, increasing the appeal of euro-denominated assets.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across firms), with Goldman at the upper bound (1.1800) and MUFG at the lower (1.1800). fxstreet.com’s outlook aligns with this bullish trend, anticipating further support for the euro from ECB policy expectations.
How firms align
Firms such as JPMorgan and MUFG are positioning for a similar bullish trajectory, with targets of 1.1800 and 1.2000 respectively for March 2026, supporting the notion of a rising EUR/USD. In contrast, BofA's view suggests more caution, setting its target at 1.1240.
What the data shows
Recent forecast revisions indicate a notable increase in projections, especially from Deutsche Bank and ING, who have both revised their March 2026 targets upward to 1.1800. Our published research highlights a current median target of 1.16 as seen in /research/eurusd-ecb-rate-path-2026-08-14.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Current spot EUR/USD at 1.1419 supported by hawkish ECB sentiment.
- 02Expect further inflation data to influence ECB rate decisions.
- 03Watch for ECB announcements that could prompt moves above the 1.1700 level.
Market implications
Next key levels to watch include 1.1700, where resistance may build, and any ECB announcements scheduled in the coming weeks. With our consensus target at 1.1700, market participants should brace for volatility around these dates.
Risks to this view
Any signs of dovish shifts in ECB rhetoric or unexpected economic data from the Eurozone could invalidate the bullish outlook for the euro. A decisive break below the 1.1400 level might force traders to reassess their positions.
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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