Citi maintains a bullish bias on EUR/USD and likes to but dips around the 1.20 level.
"EURUSD led G10 outperformance, moving above the psychologically significant 1.2000 handle. This puts spot at the highest level we have seen since 2018. As a reminder, EURUSD also completed a bullish outside month Monday, signaling a close mirror to price action we saw in 2017. CitiFX Technicals see a move towards the 1.2500 area as was seen in January 2018... Our Asia spot trader is also bullish but prefers to re-engage around 1.2000," Citi notes.
"As for ECB implications, the stronger currency is likely to reinforce CitiFX Strategy's expectations at the December ECB for the central bank to increase PEPP purchases by around EUR 500bn, while also extending other stimulus (APP, LTROs)," Citi adds.