EUR/USD Weekly Forecast: US inflation and war doldrums to keep shaping market's mood
The EUR/USD pair is expected to remain under pressure as US inflation data and ongoing geopolitical tensions continue to shape market sentiment. The bullish outlook on the USD, influenced by the potential for an aggressive Federal Reserve stance, further argues for a cautious approach toward EUR appreciation. Current consensus forecasts signal a pivotal moment as traders weigh the implications of US economic data releases against the backdrop of global uncertainties. This reinforces the idea that absent any dovish signals from the Fed, USD strength is likely to prevail.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1583 (median across 13 firms), with Goldman at the upper end of the spectrum at 1.1200 and Commerzbank at the top forecast of 1.2000. This positioning indicates a slight divergence, as the broader sentiment remains bearish on the EUR against the USD.
How firms align
Goldman and Deutsche Bank both reflect a more hawkish outlook with targets set at 1.1800 and 1.2000 for March 2026, respectively, aligning with the headline's bearish interpretation of EUR strength. In contrast, firms like UOB and BofA lean more bearish with their March target set at 1.1536 and 1.1700, which diverges from the more aggressive bullish projections.
What the data shows
Recent revisions from firms such as BofA show increased expectations for March at 1.1700, while UOB recently marked slight adjustments in their targets. For further insights, refer to our /research/eurusd-ecb-rate-path-2026-08-07, highlighting key divergences in EUR/USD sentiment among market participants.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01USD strength likely persists; watch for inflation data.
- 02Recent geopolitical tensions are fanning risk aversion in FX markets.
- 03Key risk for EUR/USD remains if Fed shifts towards dovish policy hints.
- 04Market expectations show a wider spread in firm projections for EUR/USD.
Market implications
Traders should closely monitor US inflation data releases, which could significantly impact the USD strength narrative. A break above 1.1700 could signal potential EUR support, while levels below 1.1400 may reinforce the bearish stance. Keep an eye on our consensus target of 1.1583 as a benchmark for upcoming movements.
Risks to this view
A sudden shift in Fed policy language or an unexpected uptick in inflation metrics could lead to a reversal of the current USD bullish stance. Additionally, geopolitical stability could reinvigorate demand for the EUR, retracing levels toward 1.1800 and higher.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD Price Forecast: Buyers eye a break above the 100-day SMA
Euro: Fed repricing supports moderate gains against US Dollar – Commerzbank
Market repricing of Fed rate expectations narrows USD support, allowing EUR/USD to consolidate higher near-term resistance levels.
Euro: Upside bias hinges on 1.1565 break against US Dollar – UOB
EUR/USD break above 1.1565 would signal completion of recovery structure and shift bias toward further upside; key chart resistance for positioning.