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A break above 1.20 could trigger a move to the 1.22 area, explained analysts at Rabobank. They expect over the months ahead the pair to trade in the range 1.17 to 1.20.

Key Quotes:  

“EUR/USD has trended higher since the start of April. While it has yet to break back above the 1.20 level it has come reasonably close in recent sessions. There are various fundamental factors behind the firmer tone in the currency pair stemming from both Eurozone and US. Technicals suggest that a break above the 1.20 level could trigger a move back to 1.22 and a rally could conceivably happen fairly quickly assuming stops above 1.20 are triggered.”

“While profit-taking is perhaps inevitable after a strong move in prices, the fundamentals behind the USD remain significantly better than at the start of the year. The strength of the fiscal spending from the Biden Administration and the optimism surrounding the US’s vaccine roll-out has shifted confidence in the outlook for the US economy, particularly given the disappointments over the vaccine roll-out in the EU and in Japan.”

“In the months ahead we expect choppy conditions in G10 markets with EUR/USD potentially mostly within a trading a 1.17 to 1.20 range.”