Euro: Range-bound against US Dollar under Fed support – ING
The Euro remains constrained against the US Dollar, largely due to supportive Fed policies that bolster the dollar's strength. Current market dynamics suggest that upside potential for EUR/USD is capped in the near term, with traders likely gravitating towards range-bound strategies. The prevailing situation highlights a bearish sentiment towards the Euro amidst a neutral stance for JPY and GBP, emphasizing that traders may prefer dollar longs whilst avoiding Euro exposure.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across 11 firms), with MUFG at the upper bound (1.2600) and Citi at the lower (1.1300). ING's current outlook aligns closely with our consensus, implying a restrained Euro amid Fed support for the Dollar.
How firms align
ING reflects a bearish sentiment towards the Euro consistent with Citi's lower target of 1.1300 for March 26. In contrast, firms like Goldman and MUFG project higher targets of 1.1800 and 1.1800 respectively, suggesting some divergence within the market expectations. For further details, see our reports on each firm.
What the data shows
Recent revisions from firms such as Scotiabank and Morgan Stanley indicate targets of 1.1734 and 1.2000 respectively for March 26, showcasing a slight upward adjustment which might conflict with prevailing bearish sentiment. More insights can be found in our published research, such as /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD is currently at 1.1434, constrained by Fed policy.
- 02Range trading strategies may favor dollar longs over Euro exposure.
- 03Watch for any shifts in Fed policy that could alter Dollar strength.
Market implications
Next key levels to observe include resistance around 1.1500 and support at 1.1400. The consensus target of 1.1700 suggests traders will closely monitor any Fed communications or economic data releases that could impact dollar positioning.
Risks to this view
A significant catalyst that could invalidate the current view includes any unexpected hawkish tilt from the European Central Bank, potentially leading to upside movements for the Euro against the Dollar.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.45
Sources & References
How we cover this story
Other coverage on this pair
Euro: Resilient data backs range rebound against US Dollar – MUFG
Strong eurozone data supports EUR/USD recovery within established range; watch for breakout confirmation above recent resistance levels.