The euro story splits by time horizon: near-term research is cautious, longer-term published forecasts point higher.
The near-term caution centers on France. Analysts note a negative sovereign outlook on France, with another review due by end-February, which caps any euro rebound from softer energy prices. One strand of commentary flags the French-German 10-year spread near 1.65% as a drag, and argues that if the current AI-driven market jitters fade, the French fiscal problem reasserts itself as the dominant euro headwind. Short-term, some published views see sellers emerging around 1.1200–1.1250 on any bounce.
Zoom out, and the published consensus flips. Multiple research houses expect the dollar's structural downtrend to resume once the Fed's hiking support fades. Specific trajectories floated in recent research: EUR/USD down toward 1.14 by end-2026, then up to 1.20 by late 2027, with one forecast extending to 1.22 by early 2028.
The through-line: near-term euro weakness is a French political and fiscal story; longer-term euro strength is a dollar story. Not really a disagreement, just different clocks.
By the numbers:
• Positioning (CFTC, as of 27 Oct 2026): Euro: speculators (leveraged funds) are net short, 8.2% of open interest. That is the largest net short in a year: crowded short (COT index 0 of 100). The net position fell by 2,734 contracts on the week.