Morning briefing: On the softer Dollar, EUR/USD is moving towards 1.1250
The Dollar Index is under pressure as market participants react to anticipated Democratic gains in the upcoming US mid-term elections, effectively bolstering the EUR/USD toward the 1.1250 level. This adjustment reflects broader sentiments around the potential for a more stable policy environment, which typically favors risk assets over the dollar. With recent forecasts indicating upward movement for the Euro, the downside for the dollar appears noteworthy as positioning realigns.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1500 (median across 12 firms), with CIBC at the upper bound (1.2200) and Investec at the lower (1.1455). The headline from [fxstreet.com] aligns with the bullish sentiment toward the Euro as the pair moves closer to the 1.1250 mark.
How firms align
Notably, RBC holds a forecast of 1.1700 for March 2026, while Mizuho is more conservative at 1.1300 for the same tenor. These positions suggest a divided outlook as firms adjust to the evolving political landscape. For further details, refer to our /research/rbc and /research/mizuho reports.
What the data shows
Recent revisions from firms like UBS and CIBC have indicated bullish forecasts for the EUR/USD, with UBS adjusting their March 2026 target to 1.2000. For a deeper analysis, see /research/eurusd-ecb-rate-path-2026-11-02.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD aiming for 1.1250 amidst dollar weakness.
- 02Political shifts may create favorable conditions for Euro appreciation.
- 03Watch for DXY breaks below key technical levels.
- 04Market positioning may pivot significantly as events unfold.
Market implications
Traders should monitor the 1.1250 level closely as a potential breakout point for EUR/USD. The upcoming mid-term elections are a calendar event that could shift broader market dynamics and influence positioning in the dollar.
Risks to this view
A substantial turnaround in polling data or a surprise outcome in the elections could validate a stronger dollar appetite, necessitating a reevaluation of current bullish forecasts for 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
Euro: Rebound toward 1.1275 in focus against US Dollar - Scotiabank
ECB hawkish messaging supports December tightening expectations, capping EUR/USD downside but positioning resistance at 1.1275 amid energy headwinds.
Euro: Hawkish ECB cushions losses against US Dollar - ING
ECB hawkish positioning provides near-term floor for EUR/USD around 1.1200 despite dollar strength from potential US political outcomes.
Euro edges up against US Dollar in countdown to US Midterm elections
USD weakness ahead of midterm elections reflects typical pre-event risk-off positioning; watch for directional conviction post-results.