EUR/USD: Resilient above 1.17 with ECB split – BNY
EUR/USD holds above 1.17 as ECB internal divisions surface, with BNY highlighting a dovish-leaning split that tempers bullish conviction. The pair's resilience reflects technical support, but the policy uncertainty curtails upside momentum. For traders, this reinforces a cautious stance: the 1.17-1.18 zone remains contested, and our consensus outlook already prices a modest recovery to 1.18 by March, but the ECB's lack of unanimity could delay that path.
Where it sits in our coverage
Our consensus EUR/USD target for March 2026 is 1.1800 (median across 8 firms), with Morgan Stanley at the upper bound (1.2000) and BofA/Barclays at the lower (1.1700). BNY's view aligns more closely with the lower third — BofA and Barclays share that framing, while Morgan Stanley stands out as most bullish. The spot at 1.1500 trades 2.6% below consensus, consistent with the cautious tone BNY conveys.
How firms align
Morgan Stanley (1.2000 Mar26) and ING (1.1900) sit on the more bullish side, likely less concerned by the ECB split. In contrast, BofA and Barclays (both 1.1700) are the most conservative, reflecting the dovish risk BNY flags. Goldman and Deutsche Bank (both 1.1800) occupy the middle ground, suggesting the market consensus already embeds some caution.
What the data shows
Our research piece "/research/eurusd-consensus-divergence-may-2026" notes that the EUR/USD consensus at 1.22 for December is 3.87% above spot, indicating a broad expectation of gradual appreciation. However, the near-term divergence — with some firms as low as 1.17 — aligns with BNY's assessment that the ECB's internal split may cap rallies in the short run.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD resilient above 1.17, but ECB split limits near-term upside conviction.
- 02Consensus median for Mar26 is 1.1800; spot at 1.1500 leaves room for a grind higher, not a surge.
- 03Watch for ECB guidance clarity; a hawkish surprise could propel EUR above 1.18.
- 04Lowest firm target 1.1700 (BofA, Barclays); divergence signals range-bound trading.
Market implications
Next catalyst: ECB minutes or any policy hint. A clear hawkish pivot could target the 1.18 consensus level; failure to break above 1.17 might invite a retest of 1.15. Our 1.1800 March consensus acts as a magnet, but the ECB split suggests the path will be choppy.
Risks to this view
A decisive break below 1.17 would invalidate the resilient view, pointing to renewed EUR weakness. Conversely, if the ECB surprises hawks or US data softens significantly, EUR could rally toward 1.20 (Morgan Stanley target). The split itself is the barrier; any resolution to a unified stance would be a game-changer.
Sentiment by currency
USD-EUR+JPY~GBP~Composite USD score: -0.35
Sources & References
How we cover this story
Other coverage on this pair
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EUR/USD: Recovery eyes full retracement – Scotiabank
EUR/USD recovery momentum suggests technicians are positioning for mean reversion toward recent highs, indicating potential USD weakness into resistance.
EUR/USD: Binary path around Gulf deal – ING
EUR/USD: Oil shock, real rates and conflict risks – Commerzbank
Oil shock transmission via real rates and geopolitical premium widens USD carry advantage; EUR structural support erodes as terminal rates diverge.
Cross-firm research
EUR/USD Trades 3.87% Below Consensus: What the Gap Reveals
EUR/USD spot at 1.1727 sits 3.87% below the eight-firm median Dec-26 target of 1.22, exposing a structural divergence that demands explanation.
EUR/USD Consensus at 1.22 While Spot Sits 3.87% Below
Eight sell-side firms hold a median Dec-26 target of 1.22 for EUR/USD while spot trades at 1.1727, a gap that demands explanation.