EUR/USD forecasts are splitting along time horizons, and the split is worth understanding.
On the bullish side, one camp of researchers sees the euro climbing toward 1.17–1.18 against the dollar on a cyclical view. Their case rests on diverging central bank paths: the Fed pausing in September while the ECB delivers one more 25bp hike. That gap, they argue, should lift the pair.
A more cautious thread of recent research pushes back tactically. These analysts estimate EUR/USD is roughly 2.5–3% overvalued on their models and warn that a fresh spike in European natural gas — or a broader food and energy inflation shock — could erode the yield advantage currently supporting the euro, dragging it lower over the coming months.
The disagreement is less head-to-head than it looks. The bullish 1.17 call is explicitly conditional on the Fed skipping September; the bearish view is conditional on European energy stress worsening. Different horizons, different triggers — though if energy stays hot and central banks diverge as expected, the two scenarios start to collide.