Bank of America Global Research discusses EUR/USD technical outlook and flags a scope for a dip towards 1.20 which should provide a good entry for longs.
"Euro divergences from RSI and MACD warned of a correction, the channel line has since broken and a decline is underway. We see Fibonacci retracements of 1.2064, 1.1976 and 1.1888 to be aware of. We are uncertain if spot breaks below 1.20. Our year ahead technical view suggests positioning for further upside in 1H21 when this dip looks to be ending. We think the dip in euro is tied to the overbought oil rally and the oversold bond market," BofA notes.
"We think a dip in euro to 1.20, Brent into the $52s and 30Y UST to 1.75% is the first collusive area to evaluate entering a higher euro, higher 30Y yield and higher Brent oil trend again," BofA adds.