Euro approaches yearly lows at 1.1324 against an unstoppable US Dollar
The Euro has descended towards its yearly low of 1.1324 against a strongly bullish US Dollar, signaling increased market volatility and concern over European economic fundamentals. This recent decline highlights the ongoing strength of the US currency, propelled by hawkish Fed expectations. As the gap narrows, this trend could generate further selling pressure on the Euro as traders anticipate lower economic growth in the Eurozone, challenging Euro bulls.
Where it sits in our coverage
Currently, our consensus target for EUR/USD is 1.1700 (median across 10 firms), with Morgan Stanley projecting the highest target of 1.2000, while Danske Bank stands at the lower end with a target of 1.1100. The market sentiment appears cautious as this significant divergence raises questions about the sustainability of the Euro's strength amid the USD's recent rally.
How firms align
Despite the bearish tone from the market, firms like SocGen and Nomura maintain a bullish stance, with targets of 1.1700 and 1.1700 for March 2026, respectively. This perspective aligns them closely with the headwinds posed by the USD's strength. In contrast, Barclays and BofA are more conservative, with targets reflecting skepticism toward any immediate recovery in the Euro.
What the data shows
Forecast revisions have varied, with BofA adjusting its March 2026 target to 1.1700, indicating a lack of confidence in Euro recovery. Published research continues to emphasize the disconnect between current trading levels and the market consensus, as seen in /research/eurusd-ecb-rate-path-2026-09-28, highlighting potential risks in Euro long positions.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD trading near 1.1324 hints at increased bearish sentiment.
- 02Watch for technical support around 1.1300 as a key level.
- 03Market positioning suggests ongoing USD strength until further ECB clarity emerges.
- 04Divergent forecasts among firms could indicate a heightened risk environment.
Market implications
Traders should keep an eye on the psychological support level at 1.1300, as breaching this could trigger further downside. Upcoming ECB meetings and economic indicators will also be crucial in shaping market sentiment and expectations, particularly in relation to our consensus target of 1.1700 for March.
Risks to this view
A decisive shift in ECB policy or stronger-than-expected Eurozone economic data could invalidate the current bearish outlook on the Euro. If inflation continues to remain stubborn in Europe, it may prompt a shift in ECB’s strategy that could provide support for the Euro.
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: EUR/USD bearish bias converging on support – Societe Generale
EUR/USD approaching technical support levels with established bearish momentum; traders should monitor break-below scenarios for acceleration targets.
EUR/USD continues to decline: Too many risks
EUR/USD weakness attributed to elevated risk concerns supports USD safe-haven positioning; monitor whether risk-off intensifies or macro divergence between Fed/ECB tightening cycles sustains the move.
EUR/USD: Lagarde's dovish tilt weighs on Euro – ING
Lagarde's dovish pivot signals ECB rate-cut cycle may begin sooner than priced, pressuring EUR/USD lower and reducing carry attractiveness.
EUR/USD Price Forecast: Softens to near 1.1350 as bearish bias holds below key averages
EUR/USD break below key moving averages signals continuation of weakness toward 1.1350 support, reinforcing short-term USD strength bias.
Bank desks on this topic
FX Daily: Lagarde lifts some support from the euro
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ING cuts year-end AUD/USD target to 0.72 but sees an RBA hike blocking a retest of June lows
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Here’s how US Treasury Secretary Bessent could tempt the 10yr yield back down
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Cross-firm research
EUR/USD Trades 2.9% Below 30-Firm Consensus Ahead of Dec-26
EUR/USD spot at 1.1360 sits 2.90% below the 30-firm Dec-26 median target of 1.17, exposing a consensus that remains structurally bullish on the euro.
EUR/USD Consensus Check: Spot at 1.1373 vs 1.17 Median, Week of September 28, 2026
EUR/USD spot sits 2.79% below the 30-firm median Dec-26 target of 1.17, exposing a consensus that remains structurally bullish on the euro.
EUR/USD Consensus Check: Spot at 1.1391, Median Target 1.17 — Week of September 27, 2026
EUR/USD spot sits 2.64% below the 30-firm median Dec-2026 target of 1.17, leaving consensus firmly bullish even as tape lags.