EUR/USD is split by time horizon, according to recently published research: tactically bullish, structurally more cautious — with French politics the swing factor.
The bearish case, as several research notes argue, rests on European political fragility: nationwide protests in France, a delayed budget vote, widening French-German bond spreads, and prediction-market odds of a Le Pen presidency now near 48%. One camp of analysts also looks out to late 2026, where French fiscal strain and broader European political risk weigh on the euro.
The bullish side, flagged across multiple research desks, points to extreme short positioning in the euro that leaves the pair prone to a snap-back even without good news. One published model estimates EUR/USD is 1.3–1.5% undervalued versus short-term rate differentials, with a month-ahead target around 1.130. The recent repricing of Fed expectations has also trimmed the dollar's rate advantage.
A contrarian multi-year view argues for a dip toward 1.14 by end-2026, then a climb to 1.20 by end-2027 as structural dollar headwinds reassert.
The disagreement is really about timing, not fundamentals.