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Analysts at Citibank see the EUR/USD pair recovering over the next months. The forecast the pair will trade at 1.17 in a three month period, reaching 1.22 on a six to twelve months horizon. 

Key Quotes:

“Medium term, relative real rate differentials continue to make new local highs (almost back to zero in EUR less USD), reducing the relative attractiveness of owning US dollars for investors. We still believe that the medium – long term likelihood of EUR/USD breaking 1.20 remains high, particular as US real rates are unlikely to move materially higher given the Fed’s fresh mandate. Besides, hard data showed that the economic recovery continues.”

“EURUSD held good resistance between 1.1780 and 1.1790 (Trend lines and 55-day MA) and has since moved lower. Good support remains at 1.1612 and a break below, if seen, would bring our minimum 1.15 target back into focus.”