Barclays Research expect some risks for dollar retracement near term.

"In the midst of market pessimism around the tensions in the Middle East, we published our Outlook and a series of weekly notes, arguing that the dollar's performance was underwhelming against shocks that should have otherwise boosted it significantly. The reduction in regional pressures should, thus, drive the dollar weaker and we set EUR/$1.18 as a three-month forecast on that basis. Dollar price action, this year, has been dominated by geopolitical risks and USDG10 and USDEM negative correlation with risk sentiment has been re-established," Barclays notes.

"This past week saw a number of asset markets rush to fade the risk premia from the Middle East tensions. EUR/$ recovered back to pre-war levels and fully to our $1.18 three-month forecast. Tactical prudence would argue that price has extended significantly, while risks have yet to fully dissipate. In that sense, tactics would likely point to some risks for dollar retracement near term," Barclays adds.