Euro declines below 1.1650 as US-Iran tensions boost US Dollar
The Euro has slipped below the 1.1650 mark against the U.S. Dollar as escalating tensions between the U.S. and Iran ignite demand for safe-haven assets like the USD. The geopolitical landscape appears increasingly precarious, prompting investors to seek refuge, which traditionally supports the Dollar. This decline creates potential for a further bearish trend in EUR/USD as it breaks through critical support levels, reinforcing negative sentiment towards the Euro amid these uncertain circumstances.
Where it sits in our coverage
Our consensus target for EUR/USD currently stands at 1.1700 for March 2026, based on a median of 11 firms, with targets spanning from 1.1300 (Citi) to 1.2500 (Goldman). Today's decline pushes the rate deeper below most revisions, reflecting the growing disconnect from the consensus view.
How firms align
Goldman Sachs and JPMorgan are among the more bullish institutions, projecting EUR to recover to 1.1800 and 1.1800 respectively by March 2026. However, contrary positions from Citi highlight skepticism, aiming for as low as 1.1300, which suggests a divergence in sentiment as evidenced in our internal analysis (/reports/goldman, /reports/jpmorgan, /reports/citi).
What the data shows
Recent revisions from firms include ING increasing its EUR target to 1.1900 for March 2026, reflecting a mixed outlook among firms. The consensus currently trades at a notable 3.2% below December 2026 levels projected in earlier research (/research/eurusd-consensus-divergence-may-2026).
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD dips below 1.1650; bears eye lower support.
- 02Watch for safe-haven USD strength amid geopolitical risks.
- 03Potential downside targets approaching 1.1300 could emerge.
- 04Market sentiment remains well-divided among institutions.
Market implications
Next support levels to monitor are 1.1500 and below; breaking these could signal deeper bearish moves. Keep an eye on upcoming economic indicators and geopolitical developments that may further impact positioning. Our consensus sits at 1.1700 for March 2026.
Risks to this view
Any significant de-escalation of tensions in the Middle East or positive economic outlook for the Eurozone could quickly reverse current trends, pushing EUR/USD above 1.1700 again. A more hawkish stance from the ECB could similarly bolster 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: 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.