Euro remains capped below 1.1525 weighed by post-Fed US Dollar strength
The Euro continues to face pressure, trading below the 1.1525 resistance level following post-Fed USD strength. Current market sentiment indicates a mixed outlook, with forecasts varying widely among analysts. The recent consensus has the Euro projected to regain ground but remains constrained in the near term, reflecting uncertainty about the trajectory of US monetary policy and its implications for the Eurozone. In this context, the persistence of USD strength may keep upward momentum at bay for the Euro.
Where it sits in our coverage
Our consensus target for EUR/USD sits at 1.1700 (median across firms), with MUFG presenting a more bearish outlook at 1.1506 while Deutsche Bank is the most optimistic at 1.2500. The existing view aligns closely with Barclays and BNP Paribas, who also predict targets around 1.1700 and above in the coming months.
How firms align
Firms such as Deutsche Bank and MUFG are showcasing considerable divergence, with Deutsche Bank targeting 1.1800 by March 2026, in line with our consensus, while MUFG's lower target of 1.1506 could suggest a more cautious stance on Euro strength. Insight into these forecasts can be reviewed in our /research/eurusd-ecb-rate-path.
What the data shows
Recent forecast revisions have shown adjustments from firms like HSBC and Morgan Stanley, with the former maintaining a consistent target of 1.1700 for March 2026, indicating steady expectations despite recent volatility. The shifting forecasts underscore a cautious but generally positive outlook as evidenced by our research.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD struggling to break above 1.1525 as USD maintains strength.
- 02Traders remain cautious, focusing on upcoming Fed signals.
- 03Consensus remains bullish on Euro, with targets above 1.1700.
- 04Wider firm spread indicates uncertainty among analysts.
Market implications
Next, traders should watch for a sustained break above 1.1525 to gauge potential upward momentum. The upcoming ECB meeting could also provide crucial signals influencing sentiment and positioning ahead of our consensus target of 1.1700.
Risks to this view
A reversal could occur if the Fed signals a more aggressive rate path or if Eurozone economic data disappoints, potentially pushing the Euro below 1.1500 and invalidating the current bullish outlook.
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD Price Forecast: Recovers further from March low, climbs to 1.1525 on weaker USD
EUR/USD: Growth convergence and Fed repricing – ABN AMRO
Growth convergence between eurozone and US combined with Fed repricing cycle narrows rate differentials, supporting EUR/USD revaluation.
Germany ZEW Survey - Economic Sentiment turns positive 10.5 in June: What it means for EUR/USD?
Positive German ZEW sentiment shift reduces eurozone recession risk premium and supports EUR/USD near-term, though index level remains historically weak.
EUR/USD Price Forecast: Struggles to return above 20-day EMA, eyes on Fed policy
EUR/USD rejection at 20-day EMA with focus shifting to Fed policy signals technical weakness ahead of potential rate decision signals.
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