Credit Agricole CIB Research discusses EUR/USD outlook and flags a scope for a consolidation phase in the near-term.
"In all, we doubt that further sustained EUR/USD upside is likely in the very near term. Indeed, we note that some positives seem to already be in the price of the single currency.
Indeed, EUR/USD is looking overvalued relative to our fair value model that is based on short-term drivers like EUR-USD rate and box spreads as well as the spread between BTP and Bund yields," CACIB notes.
"Moreover, our positioning data is highlighting that FX investors have recently amassed their biggest EUR-long in recent history. They may look for more evidence of cyclical and central bank policy decoupling between the Eurozone and the US to add to their longs," CACIB adds.