EUR/USD Price Forecast: Strong US CPI keeps bears in control despite oversold RSI
The recent increase in US CPI has solidified the USD's strength, pressuring the EUR/USD pair and maintaining a bearish outlook for the euro despite indications of being oversold. Given the economic context, this divergence suggests that fundamental factors are likely to dominate the market over technical indicators. The persistent strength of the dollar underscores underlying economic resilience, which may keep bears in control despite near-term signals that could suggest a rebound in euro pricing.
Where it sits in our coverage
Our current consensus for EUR/USD sits at 1.1600 for December 2026, reflecting a broad range in forecasts from 1.12 to 1.20 across various firms. This indicates a dichotomy in expectations, with Rabobank at the upper end forecasting as high as 1.1800, while TMGM maintains a more bearish view at 1.1448 for the same period.
How firms align
Several firms align with the bearish sentiment noted in the headline, particularly UOB with a target of 1.1400 and Mizuho at 1.1500 for March 2026. In contrast, firms like CIBC project higher targets near 1.1866, indicating a more optimistic outlook against the prevailing bearish narrative. More details can be found in our reports, such as /research/eurusd-ecb-rate-path.
What the data shows
Recent forecast revisions show a consistent tightening among firms, with UOB lowering its March 2026 target to 1.1536. This aligns with insights from our previous research, emphasizing the notable divergence from current spot levels compared to consensus targets — see /research/eurusd-ecb-rate-path-2026-10-12 for further analysis.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01USD strength remains dominant post-CPI, keeping EUR bears in control.
- 02Monitor for technical retracements as traders watch for oversold conditions.
- 03A pivotal level to watch is 1.1200— breaching may signal an extension of bearish momentum.
Market implications
Key events to monitor include upcoming US economic releases and any shifts in ECB policy that could impact the EUR/USD trajectory. Given our consensus target of 1.1600 for December 2026, movement near 1.12 could be critical for future direction.
Risks to this view
Should inflationary pressures ease unexpectedly, or if there are significant shifts in monetary policy from the ECB, this could undermine the current bearish outlook and prompt a reversal in the EUR/USD pair dynamics.
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 holds recovery move near 1.1220 against US Dollar ahead of US PPI data
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EUR/USD Price Forecast: Extends recovery above 1.1200 at US Dollar's expense
EUR/USD break above 1.1200 signals weakening USD momentum; watch for technical confirmation before positioning beyond tactical levels.