Euro recovers further against US Dollar amid AI sell-off narrative
The euro has seen gains against the US dollar, buoyed by the recalibration of market sentiment as investors pivot away from riskier AI stocks amidst a broader sell-off. This shift is shifting flows away from USD carry trades, thereby supporting the EUR/USD pair above recent support levels around 1.1250. With the market increasingly nervous about the tech sector, this backdrop heightens the relevance of euro strength, particularly as FX traders reassess their positioning in light of evolving risk assets.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1600 (median across firms), with Rabobank at the upper end of the range (1.1800) and TMG at the lower end (1.1447). This positioning indicates a bullish outlook for the euro, aligning with the current recovery seen in the pair following the recent sell-off in major tech stocks.
How firms align
Rabobank remains optimistic with a target of 1.1759, reflecting a positive sentiment on the euro's performance. In contrast, TMGM and Mizuho are more conservative, with targets ranging from 1.1300 to 1.1448, suggesting a mixed outlook among analysts. This divergence emphasizes a developing trend within the FX space amidst shifting market dynamics.
What the data shows
Recent forecast revisions indicate a general shift toward bullish expectations for the euro, with firms like UOB increasing their target to 1.1536. Notably, in our latest research (/research/eurusd-ecb-rate-path-2026-10-15), we explore the underlying factors driving these consensus target adjustments as EUR/USD trades more than 3.5% below the median target of 1.16.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Euro strengthens to 1.1253, fueled by the unwinding of AI stock positions.
- 02Risk-off sentiment is creating opportunities for traders focusing on EUR/USD.
- 03Critical resistance near 1.1300, with support seen in recent trading patterns.
Market implications
Traders should monitor the 1.1300 level closely as a potential pivot point for further euro strength. Upcoming economic data releases from the Eurozone could influence the consensus view, especially if they exceed expectations. Our current consensus target remains at 1.1600, reflecting overall bullish sentiment.
Risks to this view
A reversal in euro strength could occur if tech shares stabilize or rally, drawing capital back into USD-denominated assets. Furthermore, any hawkish signals from the Federal Reserve could also undermine the euro's current momentum, especially if inflation data points to persistent USD strength.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.35
Sources & References
How we cover this story
Other coverage on this pair
Euro: Consolidation potential against US Dollar on CPI – ING
EUR/USD Price Forecast: Euro stalls below 1.1240 with Eurozone Inflation data on tap
EUR/USD technical resistance at 1.1240 combined with upcoming Eurozone CPI print creates near-term downside risk if inflation data misses expectations.