- The EUR/USD forecast for 2026 is driven by several fundamentals such as ECB/Fed divergence and geopolitics.
EUR/USD Live Chart
The EUR/USD is currently trading at 1.1684 as of writing on 12 January 2026. The European Central Bank’s reference rate for the pair as of 9 January 2026 stood at 1.1642.
This information is relevant, as the consensus EUR/USD forecasts from several institutional analysts favour a prolonged period of consolidation or only a modest increase in 2026.
The medium-term weekly chart indicates that the uptrend move from the 2025 lows appears to have stalled at the 1.1832 -1.1850 resistance band. Following this rejection, the price has slipped into a consolidation phase.
EUR/USD Forecast 2026: Fundamental Drivers
The five fundamental factors that are driving the EUR/USD forecasts for 2026 include the following:
- ECB vs Fed Policy Divergence
- Fed Independence/Political Risk Factors
- Eurozone Inflation
- Eurozone growth and policy thrust
- Global risk sentiment
ECB vs Fed: Policy Divergence
The ECB is expected to keep rates steady in 2026, while there are expectations of additional Fed easing. This policy divergence supports the Euro. However, US inflation and employment statistics will determine the timing of this impact on the pair.
Fed Independence
The independence of the Fed has been called into question once more after reports emerged over the weekend that US Fed Chair Jerome Powell is under criminal investigation. NAB, one of the institutions providing EUR/USD forecasts covered by this piece, believes the issue of Fed independence will underpin the USD outlook for 2026.
Eurozone Inflation
The latest ECB staff projections forecast that Eurozone inflation will drop below the ECB’s 2.0% target in 2026. At 1.9%, the forecasted 2026 Eurozone inflation shows a further cooling from the 2.1% recorded in 2025. The staff projections align with the ECB’s current stance, which is to keep policy unchanged and to become less restrictive over time if inflationary pressures ease.
Eurozone Growth
A sustainable growth impulse within the Eurozone in 2026 is seen as supportive of bullish EUR/USD forecasts. According to Westpac, the expectation for 2026 is improved growth, propelled by increased defence spending and investment.
Global Risk Sentiment
The EUR/USD remains susceptible to risk-on/risk-off sentiment, mainly when driven by geopolitical factors or tariff shocks.
EUR/USD Forecast 2026: Institutional Targets
There are several institutional targets to consider. All of these fall into the 1.20-1.26 price range.
MUFG has an explicit EUR/USD forecast for end-2026; 1.2400 is the sweet spot for this bank, as indicated in its post-peak USD framework. NAB has a quarterly guide, calling for 1.20, 1.21, 1.23, and 1.22 across the four quarters of 2026. The bank also sees a possibility of the pair rising above 1.20 in 2026, even as it respects the 1.25/1.26 ceiling in its assumptions.
Westpac’s call is more conservative: its end-2026 EUR/USD forecast hovers around 1.20.
Base case: The base case scenario for the pair sees 1.20-1.23 as the most notable price target, which comes in on the back of Fed easing and softer USD risk premium.
Bull case: The post-peak USD bull case scenario sees a sharp decline in US bond yields amid political risk premiums. Under these conditions, a push to the 1.24 price mark cannot be ruled out.
Bear case: A bear case unfolds if the USD remains resilient and risk-off sentiment dominates market activity in 2026. This scenario will leave the EUR/USD capped, with a choppy consolidation phase.
EUR/USD Technical Outlook
The primary trend showed a strong bullish leg, pushing the pair from 1.07 to 1.18-1.19. Since July 2025, the pair has shifted into consolidation, oscillating between 1.15/1.15s and the high end of 1.18s/1.19. The most recent price action saw a rejection from the 1.1813 high of 24 December 2025, which tested the supporting trendline but failed to degrade it.
As long as the 1.1616 support holds, the bulls have a chance at taking the bounce towards 1.1813 for a retest of this recent swing high. If this high is uncapped, the 1.1921 northern target comes into focus, which is the previous high from September 2025.
On the flip side, the prior swing support and the lower-range shelf at 1.1474 come into view if the bears take out the 1.1616 support. The 31 July 2025 low at 1.1398 becomes the next downside target if the decline continues below 1.1474.
FAQ
What is the price of the EUR/USD today?
The EUR/USD is trading 0.45% higher on the day and its last price as of writing was 1.1686.
What is the EUR/USD forecast range for 2026?
The EUR/USD is forecast to trade between 1.20 and 1.24 as the base case scenario for 2026.