EUR/USD outlook splits sharply by horizon, according to research published this week.
On the near-term view, several analyst camps see downside for the euro. The core argument: surging European natural gas prices (with TTF benchmarks hitting new highs) are squeezing eurozone growth while reinforcing expectations that the Fed stays tight for longer. That widens rate differentials in the dollar's favor. One thread of recent research adds that European rate pricing isn't reacting to the energy shock as aggressively as US rate pricing — which makes the euro attractive as a funding currency to short against higher-yielders. Options market data cited in the published research shows elevated demand for euro downside protection, and US macro resilience is described as underpinning dollar strength.
A contrarian, longer-horizon view argues the opposite: as US–EU rate gaps narrow and global growth stabilizes, researchers in this camp see EUR/USD climbing from around 1.05 in early 2025 toward 1.16–1.18 by late 2026 into 2027.
Less a real disagreement than a horizon gap — the bears are trading months, the bulls are forecasting years.