Morning briefing: EUR/USD is headed towards 1.1300
The recent Democratic victory in the US midterm elections is exerting significant downward pressure on the US dollar, with the Dollar Index currently trading below 101.50. Analysts speculate further declines could test levels around 101, potentially leading towards 100.35 in a bearish scenario. This sentiment strongly supports a bullish view on the EUR/USD, with key levels attracting attention as they suggest a potential rise towards 1.1300. Monitoring this movement is critical in the context of broader US fiscal dynamics.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1500 (median across 12 firms), with RBC at the upper bound (1.2000) and ABN AMRO at the lower (1.1284). The bullish sentiment highlighted by the recent election results aligns closely with expectations from firms like Commerzbank with a higher end target of 1.1900.
How firms align
Several firms such as Mizuho have positioned similarly with a near-term target of 1.1300, in sync with the current market sentiment around the euro's strength following political developments. Conversely, Investec is relatively more conservative with a target of 1.1455, suggesting less enthusiasm in the near term. For more detail, see our reports on Mizuho and Investec's targets.
What the data shows
Recent revisions show a push from UBS towards a bullish 1.2000 target for March 2026, reflecting growing optimism in the euro's future. Analysts should reference our research on the ECB's rate path for additional context on potential rate impacts (/research/eurusd-ecb-rate-path).
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD could test 1.1300 amidst USD weakness post-midterm elections.
- 02USD below 101.50 makes a compelling case for euro strength.
- 03Break below 101 could expose further downside in the DXY.
- 04Consensus continues to shift upward, led by bullish revisions.
Market implications
Next, watch for EUR/USD movements around 1.1300, where a sustained break could signal stronger bullish momentum. Key economic indicators and the next ECB meeting will be critical in shaping the outlook, particularly as we assess the consensus target at 1.1500.
Risks to this view
Should the Dollar Index rebound and reclaim levels above 101.50, this would invalidate the current bullish outlook on the EUR. Moreover, any unexpected hawkish signals from the Fed could similarly reverse market sentiment against the euro.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.55
Sources & References
How we cover this story
Other coverage on this pair
EUR/USD Weekly Forecast: Greenback holds firm despite looming US political stalemate
USD resilience despite US political uncertainty suggests safe-haven demand remains the dominant driver; EUR/USD breakdown below 1.1200 month-range may accelerate if risk sentiment deteriorates.
Euro: Rotation into Dollar cash caps gains against US Dollar – ING
EUR/USD upside capped by continued dollar cash rotation despite US tech weakness; Treasury correlation reassertion limits euro tactical strength.
EUR/USD Price Forecast: Declines below 1.1200 as bearish bias holds below key technical resistance
EUR/USD breaks below 1.1200 technical level ahead of data events; watch for Eurozone retail sales and US nonfarm payroll reactions.