EUR/USD spent the week pulled between weakening European fundamentals and longer-horizon calls for a softer dollar.
Bearish arguments dominated the near-term tape. Multiple research notes flagged deteriorating eurozone PMIs, downgraded German growth, rising political risk, and a seventh consecutive markdown to the area's growth outlook. With only one further ECB hike priced and the Fed narrative still hawkish, analysts pointed to downside toward 1.15–1.16, with one house cutting H2 2026 forecasts to the 1.13–1.15 range citing renewed US exceptionalism. Energy-import dependence and geopolitical risk around Russia/Ukraine and the Strait of Hormuz were cited as additional drags toward 1.14 in coming months.
Longer-dated views stayed constructive, however. Several strategic forecasts kept EUR/USD recovering to 1.20–1.22 by end-2026 and 1.25 by end-2027, premised on dollar diversification, eventual energy normalization, and a relatively hawkish ECB. One thread also flagged that a German CPI print above 3% or a Hormuz reopening could spark a near-term relief rally, though sustaining 1.18 would require a more dovish Fed.