Euro: Modest pullback before ECB decision against US Dollar – Scotiabank
The Euro is experiencing a modest pullback against the US Dollar ahead of the upcoming ECB decision, reflecting market caution. Scotiabank indicates that this retracement occurs in a broader context where the Euro has been relatively stable, trading at 1.1434. This pullback matters now as investors reassess positions ahead of potential shifts in monetary policy, especially with varying projections from market participants regarding the ECB's tightening path.
Where it sits in our coverage
Our consensus EUR/USD target rests at 1.1700 (median across firms), with Goldman positioned at the upper end (1.1800) while Citi forecasts the lower end at 1.1300. This wide dispersion in targets suggests a divergence in sentiment regarding the ECB's upcoming decisions and its implications for the Euro.
How firms align
Notably, firms like Goldman and Commerzbank are bullish, projecting targets of 1.1800 and 1.1900, respectively, which aligns with Scotiabank's outlook of a modest pullback rather than a trend reversal. On the contrary, Citi remains more conservative with a target of 1.1300, indicating cautious sentiment among some desks.
What the data shows
Recent forecast revisions by firms such as HSBC and Rabobank show slight upward adjustments for the Euro, with HSBC recently revising its Mar26 target to 1.1700. These revisions, alongside our internal research (/research/eurusd-ecb-rate-path-2026-07-16), highlight the prevailing optimism around the Euro despite current fluctuations.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD currently sits at 1.1434 ahead of the ECB decision.
- 02Watch for market reactions post-ECB which could challenge current targets.
- 03Consensus target remains firm at 1.1700 with upper targets peaking at 1.1900.
- 04Divergence in forecasts indicates uncertainty around ECB policy direction.
Market implications
Traders should monitor the upcoming ECB announcement closely, focusing on levels around 1.1700. A break above or below this consensus could signal a shift in market sentiment towards the Euro.
Risks to this view
Should the ECB signal a more dovish outlook than expected, particularly in terms of rate hikes, it could invalidate bullish sentiment and lead to a significant EUR/USD drop.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
Firms mentioned
Sources & References
How we cover this story
Other coverage on this pair
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