Global FX: EU deep dive, US roundup, back to school themes
The desk interprets the latest commentary from J.P. Morgan as reflecting a crucial moment for EUR/USD dynamics influenced by growth and fiscal developments in the Euro area and upcoming U.S. economic indicators. Per the full note, the conversation underscores a resilient Euro amidst lower yields, signaling potential instability for the greenback. The ongoing narrative positions EUR/USD to engage with a carry trade bias as fiscal policies unfold both in Europe and the U.S. Their mention of critical U.S. events — particularly inflation data and payroll figures — highlights catalysts likely to impact trader sentiment through fall. Given the current spot at 1.1446, our consensus among firms has a median target of 1.1700, with a range of expectations spanning from 1.1200 to 1.2000.
What the desk is arguing
The desk clarifies that the commentary from J.P. Morgan suggests that the Eurozone's growth and fiscal strategies are pivotal for the EUR/USD's trajectory. This analysis emphasizes carry trades as fundamental to navigating market volatility in response to fluctuating global yields and economic metrics.
Notably, the Federal Reserve's approach to inflation metrics, including PCE, and upcoming payroll data is expected to influence market positions significantly. J.P. Morgan's commentary posits that monetary policy adjustments on either side of the Atlantic could substantially shape directional momentum for the EUR/USD pair.
Where it sits in our coverage
Our current consensus target places the EUR/USD at 1.1700, with individual firms reporting slightly different forecasts by December 2026: - tmgm: 1.1450 - investec: 1.1700 - rbc: 1.2000
This viewpoint offers a moderate collaboration with prevailing sentiment, particularly aligning closely with estimates from investec and rbc, which occupy the higher range of predictions. Such positioning reflects optimism about the Euro's resilience.
How other firms see it
Aligned firms such as investec and rbc reinforce the bullish sentiment for the EUR/USD, with targets at or above 1.1700. In contrast, danskebank presents a lower forecast of 1.1100 for December 2026, signaling skepticism regarding Euro strength.
The anticipation surrounding U.S. inflation metrics and labor reports could serve as significant flashpoints that impact both the EUR/USD and related pairs like USD/JPY or AUD/EUR in the upcoming weeks. This suggests traders should watch correlations closely as developments unfold.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01J.P. Morgan highlights growth dynamics in the Euro area as critical for EUR/USD performance.
- 02U.S. events, including PCE and payrolls, are poised to create volatility in the FX market.
- 03Carry trade themes are emerging strongly in current market sentiment.
- 04Current consensus for EUR/USD stands at a median target of 1.1700.
Market implications
Traders should closely monitor the PCE and payroll data due in the coming weeks, as these events could drive significant movement in the EUR/USD pair. The current spot level of 1.1446 remains under the consensus target, indicating a potential upward adjustment.
Risks to this view
A shift in U.S. monetary policy, leading to a more hawkish stance from the Federal Reserve than currently anticipated, could adversely impact the Euro's strength. Similarly, any signs of economic weakness in the Eurozone could destabilize bullish sentiments for EUR/USD.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Morgan Stanley | Bullish | 1.2150 |
UOB | Bullish | 1.1800 |
ING | Bullish | 1.1700 |
Meera Chandan, Greg Fuzesi and Patrick Locke discuss the recent growth and fiscal dynamics in the Euro area with implications for EUR/USD; US events (PCE, JH, upcoming payrolls) and the main back-to-school themes for FX (all roads lead to carry). This podcast was recorded on 28 August 2026. This communication is provided for information purposes only.
Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS- 5416260-0 , https://www.jpmm.com/research/content/GPS-5405224-0 , https://www.jpmm.com/research/content/GPS-5426556-0 , for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2026 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P.
Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P.
Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party.
Sources & References
How we cover this story
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