Euro: Downside risks persist against US Dollar – Commerzbank
Commerzbank highlights persistent downside risks for the euro against the US dollar, reinforcing a bearish outlook on the EUR/USD pair. With the current spot around 1.1253, the call for tactical USD longs aligns with our view, as recent forecasts indicate a significant divergence between market sentiment and projected targets. Economic indicators and disparate central bank paths may exacerbate the euro's vulnerabilities, making this an essential moment for traders to reassess positions.
Where it sits in our coverage
Our consensus EUR/USD target is 1.1634 (median across 30 firms), with CIBC at the upper bound (1.2200) and TMGM at the lower (1.1447). Commerzbank's bearish stance underscores significant downside risks, diverging from the prevailing optimism reflected in many firm targets, particularly towards June and December 2026.
How firms align
Firms like Rabobank and SocGen have targets that align more closely with Commerzbank's view, forecasting 1.1759 and 1.1700 for Mar26, respectively. In contrast, TMGM's targets illustrate a more pessimistic outlook, suggesting a tactical divergence in sentiment across the board; refer to our internal reports for detailed comparisons: /reports/rabobank and /reports/socgen.
What the data shows
Recent forecast revisions have shown Mizuho lowering its March 2026 target to 1.1500, indicating caution among analysts. Our research also emphasizes the substantial gap between current spot levels and consensus targets, suggesting that traders remain skeptical despite projected recoveries — see /research/eurusd-ecb-rate-path-2026-10-07 for insights on this divergence.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Commerzbank's bearish call highlights risks for the euro at 1.1253.
- 02Traders may consider tactical USD longs as EUR struggles.
- 03Watch for potential shifts in ECB policy that could affect EUR/USD levels.
Market implications
Next week's economic calendar will be pivotal, as market participants await US inflation data that could trigger significant moves in the USD. Maintaining awareness of support at 1.1200 will be crucial, given our consensus target of 1.1634, which seems elevated compared to current sentiment.
Risks to this view
An unexpected hawkish shift from the ECB or surprising economic data that strengthens the euro could invalidate Commerzbank's bearish outlook. Any signs of rates stabilizing in the Eurozone may also shift sentiment quickly.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Firms mentioned
Sources & References
How we cover this story
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