Morning briefing: EUR/USD eyes 1.1100 support amid persistent US Dollar rally
The EUR/USD pair is facing significant downward pressure, particularly as the US dollar continues its rally towards a critical support level of 1.1100. As the dollar strengthens, market sentiment remains distinctly bearish for the euro, indicated by a composite score of 0.65. This shift poses questions about EUR positioning, especially if the 1.1100 support level is breached, which could signal deeper structural weaknesses in the eurozone economy. Traders should be vigilant as movements through these levels could set the tone for the EUR/USD trajectory in the coming sessions.
Where it sits in our coverage
Our consensus target for EUR/USD currently sits at 1.1600 (median across 12 firms), with Rabobank at the upper bound (1.1800) and TMG at the lower bound (1.1447). Although our consensus suggests a rebound potential, current market dynamics indicate significant downside risks, particularly with the dollar’s strength testing key support levels.
How firms align
Firms such as Rabobank (Mar26 target at 1.1759) and SocGen (1.1700) align closely with this bearish sentiment, indicating a cautious view on the euro. Conversely, TMG's targets (1.1447) are more conservative, suggesting a downward tentativeness which gives credence to the current bearish sentiment reflected in the market. More detailed positioning can be found in our analyses on these firms at /reports/rabobank and /reports/socgen.
What the data shows
Recent forecast revisions from firms like UOB indicate a shift towards more realistic expectations for the euro, seeing targets like 1.1536 by Mar26. Our published research also outlines this consensus gap, illustrating that the current spot at 1.1253 is already substantially below the median target at 1.1600, as discussed in /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD nearing critical 1.1100 support as US dollar strength persists.
- 02Bearish sentiment mounts, and 1.1100 break could lead to deeper weakness.
- 03Watch key economic data releases to gauge potential shift in EUR positioning.
Market implications
Investors should monitor the 1.1100 support level closely as a breach could exacerbate selling pressure on the euro. With the consensus target at 1.1600, any deviations could heighten volatility in trading. Additionally, upcoming economic indicators from both the US and eurozone may provide further clarity on market direction.
Risks to this view
A reversal in this bearish view could occur if there is surprising positive economic data from the eurozone, particularly if it outperforms expectations. Additionally, any signals of a dovish shift from the US Federal Reserve could also strike a blow against the dollar’s current strength, challenging the prevailing bearish thesis for EUR/USD.
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 due for a correction? USD/JPY to resume downtrend?
Euro: Gradual downside toward key support against US Dollar – UOB
EUR/USD momentum tilting lower with technical breakdown risk; USD strength likely to persist toward support confluence.
EUR/USD Price Forecast: Holds gains above 1.1150, but remains technically bearish under 100-day SMA
EUR/USD below 100-day SMA signals intermediate uptrend remains broken; watch 1.1150 support for continuation of bearish structure.