Published research is leaning bearish on the euro, with most views pointing to a weaker EUR/USD and only a minority taking a wait-and-see stance around the US midterms.
The bearish case, as laid out in recent research notes, rests on European political and fiscal risk: French budget uncertainty, the rise of the far right including Le Pen and the AfD, elevated energy prices, and concerns about Russian hybrid warfare. One camp of analysts argues European unrest is only partly priced in — the euro is near 1.12 rather than 1.14-1.15 — and that upcoming elections in France, Italy, the UK and Germany keep the risk live. Governments have little fiscal room, and markets would punish more spending. A lingering French risk premium, with spreads above 150bp now treated as the new normal, is cited as making a euro breakout difficult.
The disagreement is more about horizon than direction. Some recently published views see EUR/USD seeking support around 1.120 with no radical shift expected near-term, while others forecast 1.10 on a three-month view.
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.