EUR/USD spent the week pinned near 1.11–1.12, but published research tilted more constructive by Thursday and Friday after an ECB that leaned hawkish.
Early in the week, most analysts were downbeat on the euro: it was flagged as October's worst G10 performer, hit by French fiscal and political stress, French-German spreads at 2011-crisis levels, soft eurozone PMIs, and TTF gas prices above EUR 90/MWh. Several notes saw downside risk toward 1.10 if 1.110 broke, with Brent up 18% on the month compounding the squeeze on a currency without rate support.
The tone shifted late in the week. After Lagarde kept a December hike in play and declined to signal alarm over French bonds, multiple research desks flagged the euro as oversold, pointing to a record speculative short position, a discount versus rate spreads, and softer US data. Year-end targets published during the week clustered between 1.13 and 1.16, with longer-horizon paths extending toward 1.20 into 2027. A contrarian thread stayed firmly dollar-bullish, citing US growth leadership and carry rotation using the euro as a funder.