Euro falls back as US Dollar recovers early losses
The Euro is retreating as the US Dollar shows signs of recovery from its earlier session lows, indicating a potential technical bounce. This price action suggests complex dynamics at play, possibly tied to yield repricing or a shift in risk appetite, amplifying the bearish sentiment on the Euro. Given the market's current volatility, this moment is critical for interpreting broader trends and determining the Euro's trajectory moving forward.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.175 (median across 11 firms), with Scotiabank and HSBC at the upper end (both 1.170) and Citi at the lower end (1.130). This positioning reflects a varied outlook on Euro strength against the Dollar, with differences driven by expectations of monetary policy impacts and economic data releases.
How firms align
Goldman, MUFG, and HSBC align their views with the recent bearish trend on the Euro, forecasting targets of 1.1800 for March 2026. Their perspectives emphasize the likelihood of a weaker Euro influenced by Fed monetary policy tightening. For detailed views, refer to our /reports/goldman and /reports/mufg.
What the data shows
Recent revisions indicate Goldman and MUFG have adjusted their targets upwards for March while still suggesting potential downside for the Euro against the USD. Additionally, our recent research highlights that EUR/USD trades approximately 4.74% below the December 2026 consensus of 1.200 as reflected in /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD currently at 1.1434, reflecting bearish sentiment as USD rebounds.
- 02Technical indicators show potential resistance around 1.15 for traders.
- 03Monitor upcoming US data releases for impact on USD strength around the 1.1400 level.
Market implications
Investors should monitor the 1.1400 level for potential support, with economic calendar events relating to US inflation and employment metrics likely influencing sentiment. Our consensus target of 1.175 suggests a challenging environment for the Euro if the USD maintains its momentum.
Risks to this view
A significant reversal in this view could occur if the Eurozone shows stronger-than-expected economic data or if the Fed signals a dovish stance in upcoming policy meetings. Such scenarios could prompt a reassessment of the current bearish outlook.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.55
Sources & References
How we cover this story
Other coverage on this pair
Euro: Sideways trading outlook against US Dollar – Rabobank
Euro: Early gains against US Dollar at risk on Fed story – ING
Fed narrative reassertion threatens to reverse modest EUR/USD strength; monitor Fed speakers for hawkish messaging that could trigger dollar demand.
Euro: Hawkish Fed keeps gains contained against US Dollar – Commerzbank
Fed hawkish stance caps EUR/USD upside; expect resistance near recent highs as rate differential supports dollar through near term.