Bank of America Global Research discusses its latest EUR outlook and targets.

"Looking ahead, despite our constructive medium-term EUR bias, we hesitate to turn constructive just yet. One reason is developments in Iran and the recent surge in gas prices, with our commodities team seeing upside risks relative to current levels. A second reason is the lack of clarity on the Fed's reaction function - Jackson Hole is key. A third reason is lighter positioning," BofA notes.

"Meanwhile, disagreements have emerged within Germany's governing coalition over the proposed reforms, also ahead of the autumn state elections. As for FX hedging, low vol and restored correlations suggest no imminent changes.

As such, we await for clarity and would avoid chasing EUR higher right now. We still forecast EUR-USD at 1.12 by end-Q3, 1.15 by year-end, and 1.20 by end-27," BofA adds.