Reversing Course on EUR/USD

Positioning for sentiment and growth divergence into 2026.

Back in July, we flagged 1.2000 as a realistic upside target for EUR/USD, and by September the pair printed 1.1919 before the rally ran out of air. We cut our long barrier option early in October for a slight loss and stepped back, waiting for a cleaner signal.

Lagarde delivered it on Friday. Her speech was the final nudge we needed, as we believe the combination of deteriorating sentiment in the Eurozone and a potential reopening bump for the US economy means our medium-term outlook for EUR/USD is now bearish. It’s time to get short.