The EUR/USD is struggling to recover its composure after Monday’s fall. The EUR/USD has been mature for some correction, although our 3 -month forecast of 1.15 has already been tested today. The EUR will continue defensively in a perspective of 1 to 3 months, assuming that the Fed adopts a more moderate position next year, the EUR/USD could be directed up in 2026, potentially at 1.20 in the spring, reports Jane Foley, FX analyst of Rabobank.
The issue of trade agreements is unlikely to disappear completely for some time
“The recovery of the EUR/USD in recent months had become excessive. To this is added that the positioning data of the CFTC speculators suggest that the market is now short in USD while it has a reasonably long position in Eur. This has also made the currency pair susceptible to the coverage of shorts in favor of the USD. Despite its soft posture this week, the EUR is still Better G10 currencies so far this year.
“European officials have the need to keep the US administration on their side at a time when Europe is still Champagne and other wines and liquors are exempt from US tariffs and there are wide uncertainties about how energy purchase commitments will be fulfilled.
“Under these conditions, a strengthening in the value of the EUR will not be well received by European exporters. While we hope that the EURs maintain a softened tone in the coming months, Raboresearch now expects the Fed to cut rates four times in 2026, while we hope that the ECB keeps the stable rates.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
