FX daily: EUR/USD starting to look cheap
The EUR/USD is starting to attract attention as it appears undervalued at current levels around 1.1419. Given the recent sentiment shift towards a bullish Euro and bearish USD, this potential mean-reversion setup could present trading opportunities if macroeconomic conditions start to stabilize. Analysts are noting that a reversal from these depressed levels may offer favorable entry points, reflecting broader expectations for the Euro's strengthening against the Dollar.
Where it sits in our coverage
Our current consensus target for EUR/USD is 1.1600 (median across 11 firms), with Morgan Stanley projecting a higher target of 1.2000 and TD at the lower end with 1.1447. The recent pricing suggests that there is room for appreciation in the Euro, aligning closely with sentiments suggesting the pair is undervalued at these levels.
How firms align
Goldman Sachs, Deutsche Bank, and JPMorgan are particularly bullish, all targeting 1.1800 or higher for March 2026, indicating a stronger outlook for EUR/USD. In contrast, firm TMG and BofA take a more conservative stance, with near-term targets hovering just above current spot levels. This divergence displays a significant polarization among market participants about the Euro's potential recovery.
What the data shows
Recent revisions have seen ING and Deutsche Bank increase their March EUR forecasts to 1.1700 and 1.1800, respectively, highlighting a growing consensus towards the Euro's appreciation. For further insights, see our research report on the ECB's potential rate path (/research/eurusd-ecb-rate-path).
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD at 1.1419 indicates potential undervaluation.
- 02Watch for market stabilization signals to trigger a Euro rebound.
- 03Near-term bullish sentiment aligns with a series of upward revisions among major firms.
- 04Bullish forecasts suggest targets range as high as 1.2000.
Market implications
Traders should monitor key macro data releases and sentiment shifts in the U.S. to gauge future movements. The consensus target of 1.1600 may serve as a significant level to watch for near-term positioning.
Risks to this view
Should macroeconomic conditions worsen or if the ECB adopts a more hawkish stance than expected, the current bullish outlook could reverse quickly. Any signs of USD resilience could also derail Euro appreciation.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.35
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD reacts to data: Fed rate hike expectations fall
Lower Fed rate hike odds reduce carry support for USD and extend EUR/USD reprieve; monitor next inflation print for hike probability reset.
EUR/USD Price Forecast: Hawkish ECB prospects support Euro
ECB hawkish expectations tighten rate differential vs USD, supporting EUR/USD through policy divergence premium.
Euro: Showing some undervaluation against US Dollar – ING
ING valuation framework suggests EUR/USD mean-reversion risk; technical traders may face headwinds if consensus shifts toward fair-value convergence.
Euro: Higher intraday band within broader range against US Dollar – UOB
Bank desks on this topic
FX Daily: EUR/USD starting to look cheap
Articles FX Daily: EUR/USD starting to look cheap Published 07:12 FX Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Post-CPI summer trading conditions continue to keep FX volatility subdued, leaving EUR/USD largely anchored. Still, our models are poi
Rates Spark: The yen link to US Treasuries
Articles Rates Spark: The yen link to US Treasuries Published 17:01 Rates Spark Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download US inflation data this week has been contained and very welcome for Treasuries. It absolutely eases higher rates pressure.
FX Daily: Boring CPI, boring August?
Articles FX Daily: Boring CPI, boring August? Published 07:45 FX Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Yesterday’s unexciting US CPI print left FX with little sense of direction into the end-August Jackson Hole Symposium. What can stop
Goldman Sachs says weak US data or a BOJ miss could trigger new yen intervention
The key takeaway for positioning is that Japan's firepower is not the constraint, capacity is described as ample, so the real variable is timing and trigger rather than ability to act. Goldman's framing puts two catalysts on watch: a miss on US data that weakens the case for furt
Cross-firm research
EUR/USD Consensus Check: Spot at 1.1543, Median Target 1.16 — Week of August 14, 2026
EUR/USD spot sits 0.49% below the 30-firm median Dec-26 target of 1.16, with a 0.14 dispersion range signalling meaningful disagreement beneath a neutral headline bias.
EUR/USD Consensus Check: Week of August 13, 2026
Spot EUR/USD at 1.1535 sits 0.56% below the 30-firm Dec-26 median of 1.16, with a 0.14-point dispersion signalling deep disagreement on the dollar path.
EUR/USD Consensus Check: Spot at 1.1525, Median Target 1.16 — Week of August 12, 2026
EUR/USD spot at 1.1525 sits 0.65% below the 30-firm median Dec-26 target of 1.16, with a 0.14 spread separating Nordea's 1.24 bull case from Citi's 1.10 bear.