Euro: Consolidation before potential slide against US Dollar – UOB
The euro is currently experiencing a consolidation phase against the US dollar, according to UOB's technical outlook, which anticipates a subsequent decline. This aligns with our internal sentiment where the euro is rated bearish amid a stronger US dollar forecast. The significant divergence in expectations among market participants suggests that while there is some bullish sentiment for the euro longer-term, immediate pressures lead many to predict downward movements in the EUR/USD pair.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1700 (median across 11 firms), with UBS at the upper bound (1.2000) and Citi at the lower end (1.1300). UOB's perspective indicates potential downside, forecasting a weaker euro against the dollar, which mirrors the more cautious tones from several other institutions.
How firms align
Alignment with the bearish view of the euro can be seen in targets from UOB and Stanchart, with UOB positioning for a Mar26 target of 1.1536. Conversely, firms such as Deutsche Bank and Barclays express slightly more optimism with higher targets of 1.1800 and 1.1700 for the same period, respectively. For detailed insights, refer to our reports on UOB and Barclays.
What the data shows
Recent revisions indicate a downward adjustment in targets from firms like Danske Bank and UOB, signaling a shift toward a more bearish outlook on EUR/USD. Our analysis published in /research/eurusd-ecb-rate-path underscores the current trading measures against the consensus projection nearing 1.20 by Dec-26.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01UOB sees potential EUR/USD weakness ahead, with a Mar26 target at 1.1536.
- 02Current market sentiment favors USD strength against the euro in the near term.
- 03Traders should watch for a breakout below 1.1560 as a potential downside signal.
Market implications
Next, market participants should closely monitor the upcoming economic data releases from the US and the eurozone, particularly any shift in the Fed's interest rate trajectory. Our consensus target at 1.1700 reflects a cautious approach amid these developments.
Risks to this view
A shift in this bearish outlook could occur if unexpected positive economic data from the eurozone surfaces, potentially undermining the dollar's strength. Any significant change in the ECB's rate policy stance would also be a critical catalyst to watch.
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 weakens against US Dollar as hawkish Fed bets hog limelight
Market repricing Fed hold probability higher amid hawkish rhetoric, widening rate differential favoring USD/EUR longs.
Euro: Pressured as US Dollar stays firm – Danske Bank
USD strength persisting creates headwind for EUR positioning; monitor if dollar momentum extends into risk assets or remains defensive-driven.
EUR/USD Price Forecast: Loses traction to near 1.1450 as bearish trend tests lower Bollinger support
EUR/USD break below 1.1450 would confirm bearish structure and likely extend losses toward next technical support levels.
Euro steadies as the US Dollar eases, but hawkish Fed bets limit upside
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