Euro loses momentum as US Dollar regains footing after election-led volatility
The euro has lost traction against the rebounding US dollar, pressured by a combination of lower US Initial Jobless Claims and hawkish statements from Federal Reserve officials. This shift comes after post-election volatility led to a temporary lull in USD strength. The current sentiment indicates a bearish outlook for the euro, with the recent USD recovery suggesting a potential reassessment of market positions and risk appetite.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1500 (median across 12 firms), with Commerzbank at the upper end (1.2200) and Investec at the lower end (1.1455). This places the current spot at 1.1253, indicating a significant divergence between market performance and firm expectations in the near term.
How firms align
Rabobank and Nomura align with a more optimistic, albeit cautious stance, targeting 1.1759 and 1.1700 respectively for Mar26, consistent with the recent USD strength narrative. In contrast, Investec's lower target of 1.1455 reflects a more bearish outlook aligning with current trends. See /research/eurusd-ecb-rate-path-2026-11-04 for deeper insights into these positions.
What the data shows
Recent revisions underscore the mixed sentiment, with UBS adjusting its Mar26 target to a higher 1.2000, suggesting potential for euro recovery. However, Stanchart's 1.1400 target points to cautiousness among some firms, echoing the prevailing trends within our research: see /research/ecb-decision-2026-10-29-recap for the latest ECB considerations.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01USD strength from jobless claims and Fed rhetoric pressures EUR/USD down.
- 02Key level to watch is 1.1200 as a psychological barrier.
- 03Hawkish Fed comments could further bolster the USD and drive EUR/USD lower.
- 04Bearish sentiment for EUR remains—risk of further declines if data supports USD.
Market implications
Moving forward, traders should keep an eye on upcoming US economic data releases, specifically any labor market reports that might influence Fed policy. The consensus target of 1.1500 suggests potential upside for EUR against USD, but current sentiment and positioning signals warn of immediate risks to the downside.
Risks to this view
A reversal in this view could occur if upcoming economic data shows significant weakness in the US labor market, potentially leading to a rethink of Fed hawkishness. Additionally, any unexpected shifts in ECB policy could also significantly alter the euro's trajectory.
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 Weekly Forecast: Greenback holds firm despite looming US political stalemate
USD resilience despite US political uncertainty suggests safe-haven demand remains the dominant driver; EUR/USD breakdown below 1.1200 month-range may accelerate if risk sentiment deteriorates.
Euro: Rotation into Dollar cash caps gains against US Dollar – ING
EUR/USD upside capped by continued dollar cash rotation despite US tech weakness; Treasury correlation reassertion limits euro tactical strength.
EUR/USD Price Forecast: Declines below 1.1200 as bearish bias holds below key technical resistance
EUR/USD breaks below 1.1200 technical level ahead of data events; watch for Eurozone retail sales and US nonfarm payroll reactions.