EUR/USD has briefly traded above the 1.09 level. Economists at Rabobank stick to a one-month forecast of 1.09 but note that a move lower to 1.06 is on the cards over the coming months.
“Optimism surrounding the EUR may have further to run. That said, while any pullbacks near term may be viewed as buying opportunities, a bigger test for EUR bulls may appear in a three-to-six-month view as the market faces a possible next phase of the energy crisis.”
“While our 1-month forecast stands at 1.09, we see room for a move lower to 1.06 on a three-month view. This assumes the Fed reasserts a more hawkish position on policy than the market currently expects. It also takes into account the risk that Europe’s energy crisis is far from over.”