Euro: Softer CPI may unlock 1.1600 against US Dollar – ING
The recent easing of CPI data in the Eurozone could provide a pathway for the Euro to approach the 1.1600 level against the US Dollar, aligning with ING's outlook. While current positioning sees the Euro at 1.1419, further market movements hinge on upcoming economic indicators. As traders assess the ECB's monetary policy trajectory, soft inflation data may bolster the Euro's appeal ahead.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1583 (median across 12 firms), with Commerzbank at the upper bound (1.2200) and MUFG at the lower (1.1100). ING's recent forecast aligns closely with our consensus, suggesting a potential to test 1.1700 by March 2026.
How firms align
Specific firms such as Goldman and RBC are positioned favorably towards the Euro's strengthening, with targets at 1.1800 and 1.1600 respectively for March 2026. In contrast, firms like TMGM and Danske Bank maintain a more cautious stance, noting limited upside towards higher levels. See /research/eurusd-ecb-rate-path for more detailed predictions.
What the data shows
Recent forecast adjustments have seen BofA and ING revising their March 2026 targets to 1.1700, illustrating a growing consensus on potential Euro strength. Notably, our analysis from /research/eurusd-ecb-rate-path-2026-08-09 highlights the ongoing divergence in projections with spot currently at 1.1558.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01A softer CPI could allow EUR/USD to unlock levels near 1.1600.
- 02Expect traders to watch economic releases closely for volatility.
- 03EUR's trajectory is in focus leading up to the ECB's next meeting.
- 04Current sentiment points to 1.1700 as a feasible target in upcoming months.
Market implications
Keep an eye on economic indicators ahead of the next ECB meeting, particularly CPI and employment data, as these will influence the Euro's strength against the Dollar. Our consensus target near 1.1583 suggests potential upside movement.
Risks to this view
Should inflation readings unexpectedly rise, or if the Fed signals aggressive rate hikes, we could see a reversal in the Euro's strength. A shift in market sentiment due to geopolitical tensions could also undermine bullish positions.
Sources & References
How we cover this story
Other coverage on this pair
Euro: Range tests with upside bias against US Dollar – ING
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EUR/USD Price Forecast: Flatlines below 1.1550, while staying bearish under 100-day SMA
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