Euro: Downtrend against US Dollar targets lower supports – UOB
The Euro's recent downtrend against the US Dollar signals a challenging path ahead, as downward momentum suggests further technical selling pressures. With a bearish sentiment score of 0.65 for the Euro, traders should be cautious about holding long positions. The analysis from UOB emphasizes that the current market dynamics could lead to a test of lower support levels, underlining the importance of closely monitoring price action and macroeconomic indicators moving forward.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across 12 firms), with Commerzbank at the upper bound (1.2200) and Citi at the lower (1.1300). UOB's bearish interpretation aligns with the lower end of the spectrum, as key support levels become critical for traders.
How firms align
Firms like ANZ and BNPP are notably more bearish, projecting targets of 1.1609 and 1.1600 for March, aligning with UOB's stance. In contrast, Barclays and Commerzbank exhibit a more positive outlook, forecasting levels above 1.1900 in the medium term, which diverges from the current negative momentum indicated by the latest forecasts.
What the data shows
Recent revisions reflect a consensus leaning towards the bearish, with firms like Wells Fargo and Scotiabank adjusting their March targets downward to 1.1759 and 1.1734, respectively. Our related research discusses technical aspects in depth, providing insights on price levels in relation to market fundamentals (/research/eurusd-ecb-rate-path).
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD currently trading at 1.1679 with bearish sentiment.
- 02Focus on support levels below 1.1600 as potential targets.
- 03Caution recommended for long Euro positions amidst bearish technical indicators.
- 04Consensus target shows divergence in firm outlooks, indicating volatility.
Market implications
Traders should watch for signals around key support levels, particularly if the Euro approaches 1.1600. Upcoming economic data releases, including the ECB meeting, could significantly influence market positioning and sentiment going forward. Our consensus sits at 1.1700, highlighting a critical pivot point.
Risks to this view
Reversal of this bearish view would require a stronger-than-expected economic performance from the Eurozone or dovish shifts in US monetary policy. Any significant adjustments in ECB guidance or improved Eurozone data could catalyze upward momentum against the Dollar.
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 holds steady against the US Dollar as markets await clarity on a possible US-Iran peace deal
EUR/USD Price Forecast: Bulls struggle to breach a previous support near 1.1600
Failure to break 1.1600 resistance suggests EUR/USD consolidation range; watch for breakout direction as technical support holds.
Euro: Seen drifting toward 1.1400 against US Dollar – BBH
EUR/USD technical breakdown toward 1.1400 signals weakening support structure; FX desks should monitor for acceleration below key level.
Germany's final Harmonized Index of Consumer Prices for May remains at 2.7% YoY: What it means for EUR/USD?
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