Euro: Conflict risks keep pressure against US Dollar – Commerzbank
The euro remains under pressure against the US dollar as geopolitical tensions continue to loom large, a sentiment echoed in Commerzbank's latest analysis. Given the current spot of EUR/USD at 1.1500, it reflects a cautious market response as the headline highlights ongoing conflict risks that could impede the euro's recovery. With forecasts clustering around 1.1700 for March 2026, this divergence underscores the differing perspectives amid rising volatility, making it crucial for traders to monitor conflict developments closely.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1700 (median across firms), with the highest target from Morgan Stanley at 1.2000 and the lowest target from Citi at 1.1300. This positioning aligns with the view from Commerzbank, emphasizing the euro's struggle against the dollar amidst risks from ongoing conflicts.
How firms align
JPMorgan, Goldman, and Deutsche Bank support the upward trend for the euro, each setting March targets of 1.1800 or higher. This contrasts with Citi's more bearish outlook at 1.1300 for the same tenor, indicating a split in sentiment among firms regarding the euro's near-term potential.
What the data shows
Recent revisions from ING uplifted their March 2026 target to 1.1900, signaling optimism in the euro's recovery despite the prevailing pressures. Our earlier research indicates a significant consensus gap, exemplified in /research/eurusd-consensus-gap-may-2026-20260513-1104, pointing to ongoing market recalibrations as EUR/USD trades below collective forecasts.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Geopolitical tensions sustaining pressure on EUR/USD, currently at 1.1500.
- 02March consensus target of 1.1700 may face downward adjustments if risks escalate.
- 03Watch for geopolitical developments as potential catalysts influencing the euro's movement.
- 04Divergence in firm targets indicates uncertainty surrounding euro's stability.
Market implications
Next, traders should monitor any escalations in geopolitical tensions that could further impact market sentiment. A convincing break below 1.1500 could lead to reconsiderations of our consensus target. Given the mixed forecasts, positioning ahead of key economic indicators could also signal shifts in sentiment.
Risks to this view
Should geopolitical tensions ease or economic data from the Eurozone outperform expectations, a rapid swing towards bullish sentiment for the euro could invalidate the current bearish trajectory. Specifically, clarity from upcoming NATO meetings could shift expectations dramatically.
Sentiment by currency
USD+EUR-JPY~GBP~Composite USD score: +0.60
Firms mentioned
Sources & References
How we cover this story
Other coverage on this pair
Euro: Limited downside against US Dollar with ECB hike message – MUFG
ECB's continued hike messaging supports EUR/USD floor around current levels; limited downside signals reduced momentum for USD longs.
Euro: Gains capped against US Dollar by Fed story – ING
Fed rate expectations remain supportive of USD strength, structurally limiting EUR/USD upside despite recent euro resilience.
EUR/USD Price Forecast: 20-day EMA remains key barrier as Iran uncertainty persists
Euro slips as Hormuz firefight revives US Dollar demand
Geopolitical risk in Persian Gulf elevates safe-haven demand, likely to support USD/JPY parity and cap EUR/USD downside until tensions clarify.
Bank desks on this topic
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
EUR/USD was hit in March on expectations that the stagflationary shock from Iran would resonate more in Europe than the US. The inflationary effects have been plain for all to see, but this week's release of European PMIs warns that the stagnationary effect is just starting to la
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? - eFXdata
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? eFXdata
Cross-firm research
EUR/USD Trades 3.16% Below Dec-26 Consensus as 18 Firms Hold 1.20 Median
With spot at 1.1621 and the 18-firm median Dec-26 target at 1.20, EUR/USD sits 3.16% below consensus—a gap that demands explanation.
EUR/USD Trades 3.2% Below Dec-26 Consensus as Targets Cluster Near 1.20
Spot at 1.1612 sits 3.2% below the 18-firm median Dec-26 target of 1.20, exposing a consensus that remains structurally bullish EUR despite the pair's failure to close the gap.
EUR/USD Trades 4% Below Dec-26 Consensus: What the Gap Reveals
EUR/USD spot at 1.1711 sits 4.01% below the eight-firm median Dec-26 target of 1.22, exposing a structural tension between macro conviction and current tape.