Euro: Upside bias capped by resistance against US Dollar – UOB
Despite recent attempts to regain ground, the euro's upside remains constrained by persistent resistance against the US dollar. Analysts at UOB highlight this resistance as a critical barrier that limits sustainable euro appreciation, indicating that any advances may be temporary. This dynamic aligns with the broader sentiment of a bullish USD as macroeconomic factors favor dollar strength in the near term, underscoring the importance of upcoming economic data for potential shifts in this narrative.
Where it sits in our coverage
Our consensus EUR/USD target currently rests at 1.175 (median across firms), with Deutsche Bank at the higher end of the spectrum with a target of 1.250, while Citigroup sets a more cautious target at 1.1100. UOB's positioning, as noted in the headline, reflects a cautious stance, aligning towards the lower range of expectations at 1.1536 for March 2026.
How firms align
Some firms, like Goldman Sachs and MUFG, forecast a stronger euro in the months ahead, with both targeting 1.1800 by March 2026. Conversely, Citigroup and Danske Bank remain more conservative, with targets of 1.1300 and 1.1866 respectively, suggesting some divergence in views regarding euro strength. For further analysis, see our reports on these firms: /reports/goldman, /reports/mufg, /reports/citi.
What the data shows
Recent forecast revisions indicate a notable bullish shift, with MUFG increasing their March 2026 target to 1.1800 and Goldman also revising upwards to 1.1800. This suggests a growing optimism among some analysts regarding euro recovery; however, broader consensus remains cautious against a backdrop of USD strength, as highlighted in our broader research: /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD struggles against structural resistance near 1.1400, limiting upside potential.
- 02Traders should remain alert to USD dynamics that could reinforce resistance levels.
- 03Key data releases in the coming weeks may redefine market sentiment toward the euro.
- 04Bullish revisions from firms like MUFG may indicate shifting expectations amidst resistance.
Market implications
Next, market participants should monitor resistance levels around 1.1400, as firm breaks could signal a reevaluation of the euro's strength. With our consensus number of 1.175, movements near resistance could dictate trading strategies in the interim.
Risks to this view
A reversal in this outlook could occur if unexpected hawkish signals emerge from the ECB or if US economic indicators falter, limiting dollar strength. Additionally, significant geopolitical developments could create volatility that challenges current resistance levels.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.35
Sources & References
How we cover this story
Other coverage on this pair
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