Morning briefing: EUR/USD sees near-term weakness against the US Dollar
EUR/USD is experiencing short-term weakness, reflecting a stronger USD backdrop as traders reassess their positions ahead of upcoming macroeconomic events. This decline in the euro is noteworthy, given recent positioning and broader market sentiment, which indicate ongoing downside pressure on EUR/USD. As the pair hovers around 1.1678, the market is bracing for support level tests, with tactical strategies expected to emerge in response to this dynamic.
Where it sits in our coverage
Our current consensus EUR/USD target is set at 1.1700 (median across multiple firms), with a notable spread highlighting bearish outlooks from firms like TMGm (1.1447) and Stanchart (1.1400) to bullish sentiment from Morgan Stanley (1.2000). The market's expectations show a clear division, with the bearish view occupying the lower end.
How firms align
Firms such as UOB (Mar26 target at 1.1536) and TMGM (Mar26 target at 1.1447) are positioning against the bullish sentiment indicated by the headline, suggesting a tighter ranges environment. This contrasts with Morgan Stanley's bullish Mar26 target of 1.2000, reflecting divergent outlooks within the market. For detailed insights, refer to our reports on these firms /research/uob and /research/tmgm.
What the data shows
Recent forecast revisions from Scotia (Mar26 target revised to 1.1734) and Mizuho (1.1800) indicate a struggle among analysts to find consensus amidst fluctuating market conditions. Moreover, insights from our publication on the Fed's upcoming rate decision underscore potential headwinds for the EUR/USD in the near term (/research/fomc-decision-preview-2026-09-16).
How firms align with this view
Contrary positioning
Key takeaways
- 01EUR/USD trading at 1.1678, signaling near-term USD strength.
- 02Watch for support levels as potential tactical entry points.
- 03Bearish forecasts from firms like TMGM (1.1447) and Stanchart (1.1400) highlight market divergence.
- 04Recent revisions suggest increasing caution; watch Fed's decision.
Market implications
Traders should monitor support levels closely, particularly around the 1.1600 region, as these will indicate potential reversal or continuation of the current trend. The upcoming Fed rate decision on September 16 could serve as a critical catalyst for volatility in EUR/USD, making it essential for participants to factor in this timing with our consensus target of 1.1700.
Risks to this view
A strong rebound in euro sentiment or unexpected dovish signals from the Federal Reserve could invalidate the current bearish outlook. Key catalysts to watch would include any major shifts in economic data or ECB commentary that might suggest a more aggressive monetary policy shift in favor of the euro.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.60
Sources & References
How we cover this story