EUR/USD Price Forecast: Hits one-year low, eyes 1.1350 as bullish USD offsets oversold RSI
The EUR/USD has plunged to a one-year low of 1.1500, largely driven by robust USD strength that continues to overshadow oversold RSI conditions. Despite the recent downturn, which may raise concerns among bulls, oversold conditions typically suggest a potential stabilization. However, the prevailing sentiment leans bearish for the euro as the market speculates on further divergence between the ECB and Fed monetary policies.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1700 (median across firms), with Deutsche Bank at the upper end (1.2500) and Citi at the lower (1.1300). fxstreet.com's view closely resonates with market sentiment, indicating potential further downside towards 1.1350 as the dollar maintains its bullish momentum.
How firms align
Firms like UBS and HSBC share an optimistic outlook, both projecting a target of 1.2000 for December 2026, aligning with the broader narrative of USD strength. In contrast, Citi's more cautious stance presents a target of 1.1300 for the same period, suggesting a divergence in expectations (see our internal reports for deeper insights).
What the data shows
Recent revisions highlight a shift in outlook, with Danske Bank adjusting its March target to 1.1866. Our published research on this pair, particularly the insight found in /research/eurusd-ecb-rate-path, emphasizes the diverging monetary policy paths as a key driver affecting EUR/USD.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD reaches 1.1500, a level not seen in a year.
- 02Bullish USD sentiment remains strong, influencing euro weakness.
- 03Market eyes 1.1350 as critical support amid oversold conditions.
Market implications
Upcoming economic indicators and central bank communications will be pivotal; traders should monitor any shifts in position ahead of the next ECB meeting. Our consensus target of 1.1700 remains a key level to watch going forward.
Risks to this view
A reversal in this bearish sentiment could occur if unexpected hawkish signals emerge from the ECB, potentially aligning monetary policy more closely with the Fed's stance. Key data releases surprising markets may pose a risk to current bearish views.
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 extends downfall against US Dollar amid firm Fed hike bets
Market repricing higher Fed terminal rate expectations supports USD strength against risk currencies; EUR/USD weakness reflects rate differential widening.
Euro: Dollar strength pushes EUR/USD below 1.1400 – Danske Bank
EUR/USD break below 1.1400 signals dollar strength momentum; monitor 1.1350 support for potential acceleration of positioning.
Euro weakens below 1.1400 as Fed hike bets lift US Dollar
Market repricing Fed terminal rate higher creates fresh USD strength; EUR/USD below 1.1400 signals potential momentum continuation if data supports additional tightening.
Euro drops below 1.1400 as hawkish Fed bets push the US Dollar to one-year highs
Market repricing Fed terminal rate higher supports USD strength; EUR/USD break below 1.1400 confirms positioning shift toward hawkish Fed expectations.
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