Euro bulls regained the upper hand into week's end, even as energy shocks and Fed-ECB divergence briefly pushed EUR/USD to one-year lows near 1.14.
Early in the week, several research notes leaned bearish: rising European gas prices, a heatwave draining inventories, and a widening US rate advantage after a more hawkish Fed narrative were seen dragging the pair toward 1.1360, with 1.1300 flagged as a possible test. A separate strand warned that renewed US trade pressure and tariff risks could add another headwind for the euro.
By mid-to-late week, the tone shifted. Softer US inflation data prompted analysts to mark down the odds of further Fed hikes, and the published consensus tilted back toward euro strength. Multiple strategic outlooks reiterated targets of 1.16–1.18 into end-2026, with longer-horizon views stretching to 1.20–1.22 by 2027–2028, citing improving Eurozone growth, contained inflation, and diversification away from the dollar.
Near-term, watch energy prices and Fed rhetoric — the two levers researchers say will decide whether 1.14 holds.