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EUR/USD is entrenched at the 1.17 handle, with 1.20 still looming above. Some say that oil prices are well-correlated to the 1.20 barrier. Here are two opinions:

EUR/USD: 1.20 Remains A Realistic Short-Term Target – BTMU

BTMU FX Strategy Research believes EUR/USD  break and settling above 1.1714 intra-day high from 2015, which takes EUR/USD to levels that prevailed before the formal QE announcement by the ECB in January 2015 is significant.

“Just like in H2 2014, EUR/USD moved well in advance of the formal announcement of QE, we would describe the current move as the well-in-advance move of the formal end to QE, expected by the market by around year-end.

This fundamental shift probably means  EUR/USD will now settle in a new 1.1500-1.2500 trading range going forward over the coming year,” BTMU argues.

In the near-term, BTMU argues that  an escalation of a debt ceiling crisis  would probably be enough to see EUR/USD keep climbing.

That to us points to the 1.2000 level being a realistic short-term target by the end of this quarter,” BTMU adds.

EUR/USD: ECB To Avoid Overshoot; 1.1475-1.1625 To Contain S/T Weakness Before 1.20 Breach – NAB

NAB FX Strategy Research argues that while the ECB cannot set policy based on USD weakness or fear the greenback will fall further, it can, however, be consistent and timely in its policy settings.

“A 10% rise in the trade-weighted EUR is consistent with 0.4%-0.5% off HICP over a 2-3 year timeframe.  We thus expect the ECB to press on with a September taper announcement (finer details in December) and to make clear it does not want the EUR to overshoot.  If we are wrong, it will make the announcement in October, leaving markets to keep the EUR fairly bid.

We’ve outlined 1.1475-1.1625 as the support area  that will contain any near-term weakness, before pushing on towards 1.20, but not likely sustaining a break above until 2018. Late in 2018 as the US economy builds more wages price pressure, the EUR can ease back slightly, aided by an incoming view the ECB will want the policy to flat-line for some time after getting back to neutral,” NAB argues.