Euro: Downside bias toward supports against US Dollar – UOB
The EUR/USD pair has failed to maintain its recent range, sliding to 1.1172 and reflecting a pronounced short-term downside bias, as noted by UOB. This movement signals increasing concerns about the euro's resilience against the dollar, particularly ahead of key central bank decisions later this month. The current trading at 1.1253 runs counter to the downside target suggested by UOB, which foresees a potential drift towards 1.1150 intraday.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.150 (median across multiple firms), with Commerzbank at the high end (1.2200) and Investec at the lower end (1.1455). UOB’s bearish outlook is in contrast to the more optimistic predictions from firms like Nomura and RBC, indicating potential directional misalignment in the market.
How firms align
While UOB forecasts a bearish drift, RBC’s positions suggest a higher target of 1.1600 for March, indicating a more optimistic outlook. You can find more detailed targets from RBC in our internal reports (/reports/rbc) while Nomura also supports the upside view with a similar target for March 2026.
What the data shows
Recent forecast revisions indicate a general shift in expectations, with banks like UBS pushing their March target up to 1.2000. Additionally, our research highlights a significant divergence, with EUR/USD currently trading 2.9% below the consensus of 1.15 as outlined in /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD now feels pressure, drifting toward intraday support at 1.1150.
- 02Traders should note the short-term bearish sentiment from UOB.
- 03Key influencing factors include upcoming ECB and Fed rate decisions.
- 04All eyes are on the 1.1150 level as a critical support point.
Market implications
Watch for the EUR/USD pair to test the 1.1150 support level in the coming sessions. A break below could indicate further downside towards 1.1135. Keep an eye on the upcoming ECB decision for potential volatility, given our consensus target remains at 1.150.
Risks to this view
A strong bullish surprise from the ECB or significant improvement in eurozone economic indicators could invalidate this bearish outlook, potentially pushing EUR/USD back above 1.125. Additionally, any shift in Fed policy might also impact dollar strength against 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
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