Citi likes long EUR/USD exposure around current levels targeting a move towards 1.14/1.15 over the coming months.

"Does the blockbuster US NFP report blow up the euro trade into flames? We think not, although the risk of a delayed adjustment might increase.

First, we would caution on January readings which have historically been tricky to interpret due to annual benchmark revisions and seasonal adjustment...Second, and most importantly, the Fed’s rate path should always be contrasted to the broader macro backdrop. So unless one thinks that the Fed is heading for a 6% terminal rate (unequivocally USD supportive), our main takeaway is that the strong readings last Friday will add two-way volatility and choppiness in the price action but are unlikely to change the direction of travel," Citi notes. 

"With hindsight, we were wrong to suggest buying the dip in the EURUSD at 1.09 BUT our view remains of EURUSD upside and would suggest obtaining call OTM exposure around levels of 1.07 as implied vols have come down a long way from the 2022-highs," Citi adds.