Euro: EUR/USD risk reversal long setup – TD Securities
TD Securities is highlighting a favorable risk-reward opportunity for long positions in EUR/USD, anticipating that a shift in technical dynamics could attract flows pushing the currency pair beyond 1.10. The current sentiment towards the USD remains bearish, while EUR appears bullish, reflecting a composite score of -0.65. This presents a crucial juncture for traders, as aligning technical factors could further strengthen the bullish narrative for the euro.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across firms), with RBC at the upper bound (1.2000) and Lloyds at the lower (1.1200). TD Securities' long setup indicates a potential for EUR/USD to follow the bullish sentiment reflected in our forecasts.
How firms align
Firms like SocGen (1.1700 for Mar26) and Barclays (1.1700 for Mar26) resonate closely with this bullish setup, suggesting a collective upward trend in their forecasts. Notably, our reports track their positions as supportive of the prevailing euro-strength narrative, aligning with TD's insights on favorable technicals.
What the data shows
Recent forecast revisions also depict an upward bias, with BofA adjusting to 1.1700 by March 2026 and Investec forecasting 1.1455 for the same period. Our published research emphasizes a consistent consensus, underscoring euro's potential strength as of the end of September.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD could breach 1.10 amidst bullish sentiment.
- 02Watch for technical signals supporting long positions.
- 03Key level: focus on 1.1700 as a consensus target for March 2026.
Market implications
Traders should monitor resistance around the 1.1700 target as the consensus indicates a strong push towards this level. Upcoming ECB events and economic data releases will likely influence positioning and volatility in the euro as traders seek confirmation of growth indicators.
Risks to this view
A strengthening USD narrative or unexpected changes in monetary policy could jeopardize the bullish outlook for EUR. Should the euro fall below 1.1400, it may trigger a reassessment of long positions.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.65
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD Price Forecast: Monthly outlook mixed, daily chart remains bearish
Daily technicals point lower for EUR/USD despite mixed monthly context; watch for breakdown confirmation below key support levels.
EUR/USD: Measured ECB tightening to support Euro – TD Securities
ECB tightening cycle expected to provide structural support for EUR/USD, reducing near-term USD strength relative to euro.
What is driving the US Dollar to multi-month highs against the Euro as PCE data approaches?
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