Euro: Downside risks persists against US Dollar – ING
ING highlights continued downside risks for the Euro against the US Dollar, suggesting that market positioning could require adjustments if these risks are asymmetric. This perspective points towards inherent structural weaknesses in the EUR/USD dynamics, particularly amid shifting macroeconomic conditions where the dollar retains its bullish outlook. The current spot at 1.1500 seems increasingly vulnerable as firm-target discrepancies come to light, emphasizing the need for close monitoring of positioning shifts within the market.
Where it sits in our coverage
Our current consensus target for EUR/USD stands at 1.1700 for March 2026, with an extensive range spanning from 1.1300 to 1.2000 among major institutional forecasts. Notably, firms like JPMorgan and Goldman are positioned at the upper end of this range, with targets around 1.1800. ING's recent directional bias aligns more with the bearish sentiment expressed in the market currently.
How firms align
Despite ING's bearish view, several firms have forecasted higher EUR/USD levels. Both Deutsche Bank and MUFG maintain targets of 1.1800 for March 2026, which contrasts ING's cautious stance. Conversely, Citi and HSBC's lower targets at 1.1300 and 1.1700 respectively illustrate a more bearish outlook, supporting ING’s argument. For more detail, review our /research/deutschebank and /research/mufg pages.
What the data shows
Recent forecast revisions from ING suggest a target of 1.1900 for March 2026, indicating a slight shift in their previous positioning. This contrasts with the analysis presented in /research/eurusd-consensus-divergence-may-2026-20260512-2102, which illustrates how EUR/USD currently trades approximately 3-4% below consensus expectations, reflecting significant market sentiment divergence.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD spot at 1.1500 reflects significant downside risks.
- 02Traders should monitor for asymmetry in positioning adjustments.
- 03March 2026 consensus target of 1.1700 remains critical.
Market implications
Investors should watch for movement around the 1.1500 level as it may signify further downside risks. Key economic releases in the coming weeks may impact market dynamics, potentially validating or invalidating positioning flows. The consensus target of 1.1700 will also be pivotal in shaping trader expectations in this environment.
Risks to this view
A shift in economic indicators, particularly a dovish monetary policy decision from the Federal Reserve or unexpectedly strong Eurozone data, could force a reversal of the bearish sentiment on the Euro. Any substantial change in the inflation outlook may also invalidate this view.
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.