J.P. Morgan has shifted its stance on the EUR/USD, citing fiscal support in the eurozone and signs of cooling momentum in the U.S. economy as key catalysts behind its newfound bullish outlook.
Currently trading at 1.0795, the EUR/USD has climbed 3.8% this week and 5% over the past month, signaling what the bank believes may be a turning point in the dollar’s broader trend.
Key Takeaways:
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Outlook Shift: J.P. Morgan initially expected dollar strength in Q1, but now sees the greenback weakening, citing structural headwinds.
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Target Range: The EUR/USD is expected to rally toward 1.12–1.14, fueled by improved sentiment, fiscal measures, and easing geopolitical tensions.
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Risks: A further slowdown in U.S. economic data could support the euro, though tariff risks may cap upside potential.
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Forecast Revisions: The bank previously projected 0.99 for Q1 and 1.08 for year-end, but now sees clear upside risk to these levels.
As U.S. data softens and the rate-cut narrative gains traction, investors may be positioning for a structural euro rally, potentially marking the start of a new bullish phase for EUR/USD.