Credit Agricole CIB Research discusses EUR/USD outlook and sees some positives already in spot price around current levels.

"EUR/USD has gone through an impressive reversal of fortune of late, appreciating by c.11% in the last three months and by more than 14% from its cycle lows from September 2022. A key driver of the reversal has been the steady stream of better-than-expected Eurozone data that coincided with a gradual data deterioration out of the US. As a result, investors have gone from worrying about a deep recession in Europe to positioning for a US growth downturn. This further means that while the hawkish ECB rhetoric has gained credibility, the credibility of the Fed’s hawkish communication has been eroded of late.," CACIB notes.

"With the markets pricing in c.150bp of hikes from the ECB while at the same time they expect the Fed to cut rates by 50bp in H223, however, we think that some positives stemming from the relative ECB-0Fed policy outlook are in the price of EUR/USD," CACIB adds.