Research published this week leans toward a firmer euro against the dollar over the medium term, but near-term calls stay cautious and range-bound.
The driver is dollar weakness after the US midterms. A Democratic Congress and divided government have raised doubts about further fiscal expansion, and one strand of analysis ties near-term euro support to lower US yields. Other recently-published views note the dollar slipped after the vote on political deadlock concerns, with investors having been heavily long the dollar beforehand. Conviction is limited because domestic fundamentals differ across the two economies.
Where the published views diverge is mostly on horizon, not direction. One forecast track sees EUR/USD climbing from around 1.1262 to 1.15 in Q4 2026, 1.17 in Q3 2027 and 1.20 by late 2027. A more technical read is non-committal: a close above 1.1270, possibly after the US jobs report, is the first hurdle, with follow-through above 1.1325 needed for more upside. If the pair stays bottled up, 1.10 comes back into play.
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.