Credit Agricole CIB Research adopts a tactical cautious bias on the EUR in the near-term.

"A look at our short-term valuation models would suggest that the latest bounce in the EUR is not necessarily driven by rapidly improving relative currency fundamentals. Moreover, longer-term risk reversals remain close to the extremes for OTMEUR-puts vs OTM calls for risk-correlated currencies. In our view, this highlights the persistent appeal of EUR-funded carry trades," CACIB notes. 

"We maintain a cautious near-term outlook on the EUR also because the recently introduced lockdown restrictions could slow down the recovery in a number of Eurozone economies. In addition, we note that the European corporates are not aggressively stepping-up their EUR purchases just yet," CACIB adds.