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