Euro: Medium-term downside remains in focus against US Dollar - UOB
UOB's outlook underscores ongoing downward pressure on the euro against the US dollar, suggesting a persistent structural bias favoring the USD. With the current EUR/USD spot at 1.1446, the medium-term bearish sentiment from UOB should prompt traders to reassess support levels, particularly if the market breaks through recent lows. As volatility persists, monitoring macroeconomic indicators will be crucial for gauging shifts in sentiment.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700 for March 2026, with the range among participating firms from a low of 1.1200 to a high of 1.2000. UOB's forecast of 1.1536 aligns within the lower tier of our consensus, indicating a more cautious stance relative to others like RBC (1.1600) and SocGen (1.1700).
How firms align
While UOB is projecting a target lower than the consensus median, other firms like RBC and Morgan Stanley are forecasting higher targets of 1.1700 and 1.2000 respectively for the same period, as outlined in our reports. This divergence reflects differing views on the euro's resilience against the USD as monetary policy dynamics evolve.
What the data shows
Recent revisions indicate a general bullish outlook among firms like Scotiabank and Mizuho, with updated targets for March 2026 at 1.1734 and 1.1800 respectively. This implies a divergence from the bearish stance taken by UOB, as discussed in our insight /research/eurusd-ecb-rate-path-2026-09-16.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01UOB's medium-term EUR/USD target at 1.1536 reflects bearish bias.
- 02Traders should be vigilant of potential breaks below support levels.
- 03Keep an eye on economic data releases impacting USD strength.
- 04Watch for shifts in sentiment around ECB's policy adjustments.
Market implications
Investors should closely monitor the 1.14 level for breaks that could signal deeper declines in EUR/USD, especially as the consensus target is significantly higher at 1.1700. Upcoming economic data, particularly related to both Fed and ECB policies, may provide volatility and new trading opportunities.
Risks to this view
Should U.S. economic indicators outperform expectations, this could lead to a stronger USD and further validate UOB's bearish outlook. Conversely, positive surprises in Eurozone data could bolster the euro and challenge current targets.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
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