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Bank of America (BofA) came out with the latest EUR/USD forecast while suggesting a highly uncertain outlook for the major currency pair despite targeting 1.15 for the next year.

The US bank cites the US dollar moves as the key driver while also highlighting the Eurozone (EZ) fiscal and monetary policies for the EUR/USD moves.

“Our EURUSD equilibrium range is 1.20-1.25, but our analysis suggests the EUR should be below its long-term average for as long as the EZ output gap is large,” said the bank further.

It should be noted that the EUR/USD prices have been upbeat off-late as the US dollar remained heavy. However, the recent bounce off the US dollar index (DXY), from a seven-week low, coupled with the surge in the Treasury yields, favor the EUR/USD sellers.

Read: EUR/USD Forecast: Bullish breakout losses momentum as yields soar

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