Euro: Recovery capped by resistance against US Dollar – UOB
The euro has encountered a potential barrier against the US dollar, with resistance hindering any substantial recovery, as noted by UOB. Currently priced at 1.1253, the euro struggles to breach critical levels amid diverging expectations from various firms. The implications of this resistance are significant, particularly as markets anticipate how ECB monetary policies might evolve in a contended inflation environment.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1634, with expectations ranging from a low of 1.1000 by HSBC to a high of 1.2200 from CIBC. This places the current spot price about 3.3% below the median target, highlighting potential upside in the face of technical resistance as reported by UOB.
How firms align
Several firms have targets that align with bullish sentiment towards the euro, namely Rabobank and Nomura, both projecting 1.1700 for March 2026. In contrast, Mizuho's recent forecast revision suggests a more conservative approach, landing at 1.1300 for the same period, indicating a split in outlook among firms in our coverage.
What the data shows
Recent forecast revisions include UOB adjusting its March target to 1.1536, reflecting a slightly more cautious stance. Moreover, our findings from /research/eurusd-ecb-rate-path indicate that the current spot remains sharply below the median target, emphasizing a divergence that may drive future price action.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Current spot at 1.1253 shows resistance nearing recent highs against USD.
- 02Market focus shifts to ECB actions as inflation concerns linger.
- 03Upside seen with consensus target at 1.1634, yet bullish firms diverge.
- 04Technical resistance near 1.1300 level is crucial to monitor.
Market implications
Traders should watch for any market reactions around the ECB's upcoming decisions, particularly regarding inflation. A sustained hold above the 1.1300 resistance level could signal a bullish outlook aligned with our consensus target of 1.1634.
Risks to this view
A failure to break resistance could lead to a deeper sell-off if economic indicators reflect deteriorating inflation or growth in the Eurozone. Significant shifts in ECB policy or aggressive monetary tightening from the Fed could further challenge euro strength.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.60
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD Price Forecast: Rallies fail above 1.1200 amid high Oil prices, debt woes
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Euro: Elusive recovery prospects against US Dollar – ING
ING structural thesis on EUR/USD weakness suggests institutional positioning remains tilted short euro, limiting rally attempts on technicals.
EUR/USD Price Forecast: Holds gains near 1.1230 on softer USD; bearish bias persists
USD weakness sustaining EUR/USD above 1.1230 while bearish technicals persist suggests consolidation risk ahead of key economic data.