EUR/USD Weekly Forecast: The Dollar takes back control
The recent analysis indicates a resurgence of dollar strength, prompting shifts in trader sentiment towards the USD, particularly as it gains ground against the euro. The trajectory suggests that momentum traders are likely repositioning themselves, particularly if the EUR/USD pair breaks below the key 1.08 technical support level. This dynamic underscores the evolving landscape for currency markets and the ever-pressing implications for traders focused on dollar-denominated assets.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1700 (median across firms), with RBC and Investec at the upper end of the spectrum (1.1600 and 1.1455 respectively), while Danske Bank presents a more cautious outlook with a target of 1.1866, representing the consensus range across forecasts. This suggests divergence in expectations, especially given the recent dollar strength evidenced in market movements.
How firms align
Firms like SocGen and Nomura align with a bullish outlook, maintaining targets of 1.1700 and 1.1800 for March 2026, respectively. Conversely, BofA’s more bearish position with a target of 1.1700 highlights a division that could impact overall market sway. This contrasts with firms such as HSBC, which share a similar target of 1.1700, reinforcing the consensus framing around EUR/USD’s volatile positioning going forward.
What the data shows
Recent forecast revisions from BofA and ANZ reflect an ongoing adjustment on the euro's value, with BofA revising down to 1.1700 for March 2026, compelling a reevaluation among market participants. Notably, our published research underlines the significant gap between current spot prices and median forecasts, suggesting that traders should brace for adjustments in market strategies as we approach key economic indicators.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01DXY's push suggests further strength, watch for a break below 1.08 in EUR/USD.
- 02Momentum traders may pivot quickly as US yields influence dollar dynamics.
- 03Focus on upcoming CPI data for volatility; a stronger print could enhance dollar positioning.
Market implications
Upcoming economic indicators, particularly inflation data, will be crucial in determining further dollar strength. Be vigilant for a breach of the 1.08 level in EUR/USD, as this could solidify a bearish trend. Our consensus softens as we look towards 1.1700, with major revisions influencing trading decisions.
Risks to this view
A reversal in market sentiment could occur if the Federal Reserve signals a dovish shift or if economic data shows resilience in eurozone fundamentals. Specifically, an unexpected drop in US inflation or robust growth indicators from Europe might invalidate the current dollar bullish sentiment.
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: Correction seen near key averages against US Dollar – Societe Generale
SG technical call flags EUR/USD correction risk near key moving averages; watch for breakdown confirmation to confirm bear structure.