In view of Aila Mihr, Analyst at Danske Bank, the pair’s next target could be 1.1876, 2010 lows.
“EUR/USD took another strong move higher yesterday and broke above 1.18 for first time since 14 January 2015. After a quiet European trading session with very little volatility in the major crosses, EUR/USD suddenly bounced just before London close with no news out and it seems that the move was driven by month-end flows”.
“However, price actions underscore that EUR/USD momentum remains strong and it is likely to test higher levels in the near term”.
“Technically, the next resistance level is likely to be seen at 1.1876 (2010 low), but 1.20 looks increasingly like a target within reach for a test in coming weeks”.
“Fundamentally, we still target a higher EUR/USD in 6-12 months driven by further correction of a long-standing undervaluation and less Fed-ECB divergence, and we still emphasise that investors and corporates should continue to focus on the long trend in EUR/USD”.