Published research is split on the euro — bearish near-term, more constructive over the longer run.
Spot is pinned near 1.12, and tactical calls lean negative. Several research notes this week flag the euro as the worst-performing major this month, pointing to French fiscal and political stress (French-German spreads back at 2011-crisis levels, French yields at their highest since 2002), higher European gas prices, and softer PMIs. One camp of analysts argues a 1-2% risk premium should stay embedded in the euro while those pressures persist. A separate thread suggests Fed policy may temporarily firm the dollar before its structural downtrend resumes.
Near term, researchers highlight Thursday's ECB meeting as a flashpoint — particularly if Lagarde emphasizes French risks or hints at a bond-market backstop. Some technical work sees 1.1250/70 capping upside and 1.1180 support as vulnerable, though stretched euro short positioning leaves squeeze risk.
Looking further out, the published consensus turns friendlier: 1.14 targets by end-2026, 1.20-1.22 by 2027-2028, driven largely by a broader dollar decline.
By the numbers:
• Positioning (CFTC, as of 20 Oct 2026): Euro: speculators (leveraged funds) are net short, 7.8% of open interest. That is the largest net short in a year: crowded short (COT index 0 of 100). The net position fell by 839 contracts on the week.