The Deutsche Bank updated their view on EUR/USD summarized all the factors and made a conclusion about target EUR/USD at 1.02 by Q3-end:
"The European outflow story remains fully on track.
We continue to see European outflows as part of a multi-year shift in
portfolio allocation behaviour towards foreign assets."
most important is the Fed's re-investment policy on QE assets, because
decisions here will determine the prospect of what would essentially be
QT, or quantitative tightening: nearly half a trillion dollars matures
in 2016, almost equivalent to a full QE program in reverse."
- "Irrespective of lift-off, the key point then is that Fed tightening is multi-dimensional and likely to steadily reinforce a persistent shift away from the dollar as the world's major funding currency."
"In sum, we remain bearish EUR/USD and after a Q2 lull
accompanied by much lighter investor positioning we expect expect the
weakening trend to resume," DB concludes.