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FX Outlook 2026: Navigating the Turn

LIVE28 November 2025USD bearish

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EUR/USD

Name: Investment Bank FX Research Directory
Creator: FX Bank Forecast
License: https://fxbankforecast.com/terms
Keywords: bank FX research, investment bank reports, FX strategy, institutional research directory, bank forecasts

Range-bound strength with upside bias

Moderately Bullish

BARC Forecast Path

vs Prior Forecast

Current target: 1.21Prior target: 1.19Revision: +1.7%

Cross-Firm Forecast Comparison

Key Drivers

Rate convergence

German fiscal pace

US growth resilience

Reserve diversification

EUR/GBP dynamics

All Firm Targets (Dec '26)

GSBullish1.2500

DBStrongly Bullish1.2500

MUFGBullish1.2400

INGBullish1.2200

BofABullish1.2200

BARCModerately Bullish1.2100

JPMModerately Bullish1.2000

MSBullish (H1), Fading (H2)1.1600

Key Issues for 2026

1.German fiscal expansion supportive but implementation pace uncertain

2.ECB near terminal supports EUR via rate convergence

3.US growth resilience caps EUR/USD upside at 1.25

4.Reserve diversification a slow but steady tailwind

5.EUR/GBP to decline as GBP outperforms

Risk Scenarios

Bullish breakout1.25+

US recession + full German fiscal delivery

Base case1.19-1.21

Gradual fiscal impact, steady Fed easing

Bearish~1.10

European fiscal delay, US growth acceleration

Analysis Summary

EUR/USD to strengthen modestly to 1.21 on rate convergence and European fiscal expansion. Upside capped at 1.25 by residual US growth resilience. EUR gains more pronounced vs JPY, CHF than vs GBP. Range-trading approach preferred.

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