EUR/USD: Focus shifts to Dollar weakness – Commerzbank
Market narrative has shifted from Fed hawkishness to structural USD weakness, with Commerzbank highlighting the pivot. This could sustain EUR/USD's rally above 1.10, provided no new dollar-supportive catalysts emerge. The pair now trades at 1.1500, below consensus targets for March and December 2026, suggesting further upside potential if the dollar continues to soften.
Where it sits in our coverage
EUR/USD spot at 1.1500 is 3.87% below the 2026 consensus of 1.2200, with a wide range of firm targets. JPMorgan, Goldman, ING, MUFG, and Deutsche Bank all target 1.1800-1.1900 for Mar26, while Morgan Stanley is the most bullish at 1.2000 and BofA/Barclays are more cautious at 1.1700. The dispersion underscores uncertainty around the dollar's trajectory.
How firms align
Commerzbank's bearish USD view aligns with the bullish EUR stance of JPMorgan, Goldman, ING, and Deutsche Bank, which target Mar26 above 1.18. However, BofA and Barclays are more conservative at 1.17, and Morgan Stanley's Dec26 target of 1.1600 suggests it expects the rally to reverse. The composite sentiment of -0.65 (USD bearish, EUR bullish) corroborates the headline's direction.
What our research shows
Our research /research/eurusd-consensus-divergence-may-2026 highlights the gap between spot and consensus, suggesting that if the dollar weakness narrative persists, the pair could converge toward the mean target of 1.22 by year-end.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Shift in narrative from Fed hawkishness to structural USD weakness supports EUR/USD.
- 02Spot at 1.1500 offers 3.87% upside to 2026 consensus of 1.22.
- 03Most firms align with EUR bullish view, but BofA and Barclays remain cautious.
Market implications
Watch for US data and Fed commentary that could revive dollar strength; a break above 1.18 (resistance) would confirm the bullish trend, while support at 1.14 must hold to maintain momentum.
Risks to this view
A hawkish Fed surprise or strong US economic data could reverse the narrative, invalidating the EUR/USD rally. Additionally, if the ECB signals concern over euro strength, it could cap upside.
Sentiment by currency
USD-EUR+JPY~GBP~Composite USD score: -0.65
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD strengthens as mixed US labor data and hopes for a US-Iran deal pressure the Greenback.
Soft US labor print reduces Fed rate-hike conviction; geopolitical risk-off from Iran talks risk-off flows weaken USD safe-haven demand.
EUR/USD: Recovery eyes full retracement – Scotiabank
EUR/USD recovery momentum suggests technicians are positioning for mean reversion toward recent highs, indicating potential USD weakness into resistance.
EUR/USD: Binary path around Gulf deal – ING
EUR/USD: Oil shock, real rates and conflict risks – Commerzbank
Oil shock transmission via real rates and geopolitical premium widens USD carry advantage; EUR structural support erodes as terminal rates diverge.
Cross-firm research
EUR/USD Trades 3.87% Below Consensus: What the Gap Reveals
EUR/USD spot at 1.1727 sits 3.87% below the eight-firm median Dec-26 target of 1.22, exposing a structural divergence that demands explanation.
EUR/USD Consensus at 1.22 While Spot Sits 3.87% Below
Eight sell-side firms hold a median Dec-26 target of 1.22 for EUR/USD while spot trades at 1.1727, a gap that demands explanation.