Euro: Difficult path for gains against US Dollar – Commerzbank
Commerzbank's recent assessment indicates a challenging outlook for the euro against the US dollar, suggesting limited upside potential for EUR/USD. This positioning supports a bullish sentiment towards the dollar as traders navigate through a range-trading environment. Given the structural obstacles facing the eurozone and potentially stronger economic signals from the US, the analysis underscores the difficulty of any significant euro gains in the near term.
Where it sits in our coverage
Our current consensus EUR/USD target sits at 1.1700 (median across firms), with Lloyds on the lower end at 1.1331 and RBC at the upper threshold of 1.2000. Commerzbank's sentiment appears to align more closely with the lower end of this spectrum, reflecting a bearish outlook for the euro's near-term performance against the dollar.
How firms align
Firms such as RBC and Morgan Stanley are taking a more optimistic stance with targets of 1.2000, positing that the euro could gain traction if economic conditions shift. In contrast, Commerzbank's bearish view is echoed by Lloyds, which forecasts a much more subdued performance with a target of 1.1331, reflecting the structural weaknesses identified in the eurozone. For further insights, see our research on target expectations from /research/eurusd-ecb-rate-path.
What the data shows
Recent forecast revisions from UBS and Scotiabank suggest a cautious approach with both firms adjusting their March 2026 targets to around 1.1700, indicating market participants are bracing for continued volatility. Insights from our ongoing analysis (/research/eurusd-ecb-rate-path-2026-09-10) highlight the euro's struggle to maintain upward momentum against a backdrop of rising US interest rates and potential ECB policy shifts.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Commerzbank signals limited EUR/USD upside; reinforces bullish USD outlook.
- 02Watch for how economic data impacts euro's recovery story.
- 03Near-term resistance for EUR/USD seen around 1.1700 amidst bullish USD sentiment.
- 04Areas of focus include ECB's upcoming decisions and US economic data releases.
Market implications
Traders should keep an eye on the 1.1700 level as a key resistance point for EUR/USD, particularly in light of upcoming economic releases that could sway sentiment. The June 2026 forecast also suggests that any significant moves will likely remain constrained unless there are major shifts in monetary policy expectations from either the ECB or the Fed.
Risks to this view
A reversal of this bearish view could occur if the eurozone experiences unexpectedly strong economic data or if the Fed signals a pause in interest rate hikes sooner than anticipated. Additionally, any geopolitical developments that favor the euro could quickly alter market dynamics and lead to a stronger euro.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Firms mentioned
Sources & References
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