EUR/USD spent the week on the back foot, with the published research consensus leaning bearish near term even as longer-horizon calls stayed constructive.
Tactically, analysts flagged a break below the 1.1650 range support, with several warning that a close beneath 1.1580 would open the door toward the low 1.1400s — and one 12-month call as low as 1.12. The drivers cited repeatedly: rising US Treasury yields, US growth and AI investment outperformance, a hawkish-leaning Fed, and a stagflationary hit from Middle East tensions that researchers argue weighs more heavily on Europe than the US. Soft eurozone PMIs, with French services in recessionary territory, reinforced the bearish tone, and commentators noted the ECB is unlikely to deliver the two-and-a-half hikes markets had priced.
Looking further out, a separate strand of research still sees the dollar gradually weakening on reserve diversification and narrowing rate differentials, with year-end 2026 targets clustered around 1.20–1.22 and longer-dated calls up to 1.25.
Near-term risks: Ifo, Lagarde and Waller speeches.