EUR/USD: The possibility of a break lower to 1.10 during 2022 has increased – Rabobank

Although economists at Rabobank think too long USD may curtail further gains for the greenback, they highlight the possibility of the EUR/USD pair breaking below the 1.10 through 2022. 

Long USD position may inhibit further gains for the greenback in the coming month or so

“Even though we are concerned that long USD position may inhibit further gains for the greenback in the coming month or so, we continue to favour the USD vs. the EUR and the JPY during the course of next year given scope for more hawkish action by the Fed.”

“Risk of further USD pullbacks means that we have held off from revising lower our EUR/USD 1.12 target for now. That said, the possibility of a break lower to 1.10 during the course of next year has increased.”