Synopsis:

BofA technical strategists see EUR/USD repeating the bullish reversal pattern of late 2016 to early 2017, with charts confirming a head and shoulders bottom in the DXY. If the pattern continues, the EUR/USD could rally first to 1.12, and potentially toward 1.20 over the next year. While near-term momentum may pause, any dip is a buying opportunity, in their view.

Key Points:

1️⃣ Historic Pattern Repeating: 4Q16–1Q17 Déjà Vu 📉📈

• Both EUR and DXY are tracking a near-identical technical path to the 2016–17 reversal.

• A confirmed head and shoulders in DXY signals a trend shift is underway.

2️⃣ Targets: 1.12 Near-Term, 1.20 Longer-Term 🎯

• If the rally mirrors 2017, EUR/USD could gain 17–21%, putting 1.20 and the 200-month SMA on the radar.

• BofA flags long-term DXY support at 97, further underpinning EUR upside.

3️⃣ Short-Term: Dip Likely, But It’s a Buy 📉🛒

• Near-term sentiment may be ahead of fundamentals.

• BofA’s stance: “If we see a dip in euro, we say buy it.”

Conclusion:

BofA sees compelling technical evidence that EUR/USD is mid-cycle in a bullish reversal, mirroring the post-2016 breakout. While a near-term pullback is possible, the medium- to long-term path remains higher, with 1.12 as a short-term target and 1.20 achievable within a year. Their message is clear: buy any euro dip.