EUR/USD calls are unusually split right now, and the divide comes down to time horizon and which central bank moves first.
The bearish case, laid out in several recent research notes, leans on expected Fed rate hikes, rising US Treasury yields, and higher energy prices that hurt Europe's terms of trade more than America's. Political risk is another flag some analysts raise — German election fallout and widening French and Italian bond spreads. One published view frames persistent energy costs as a structural drag on the euro through year-end.
The bullish camp, reflected in a separate strand of research, anchors on ECB hawkishness, upgraded inflation forecasts, and relative tightening momentum. One longer-horizon target cited is 1.21 by 2028; another conditional call sees EUR/USD nearing 1.20 only if the ECB tightens further while the Fed holds.
A contrarian tactical thread argues EUR/USD could actually push toward 1.15 near-term if dollar bulls are underestimating the energy-price hit. The real cross-analyst fight: can ECB tightening offset Fed and energy headwinds?