MUFG Research discusses EUR/USD outlook and doesn't expect a deeper correction from current levels.
"The euro has underperformed recently amongst G10 currencies as the US dollar has staged a relief rally. It has seen EUR/USD fall back from an intra-day high of 1.2349 on 6th January. It has been the biggest pullback in percentage terms (-1.7%) since late October/early November (-2.3%). The loss of upward momentum suggests that the pair is beginning to consolidate at higher levels," MUFG notes.
"We expect EUR/USD to trade within the higher range between 1.2000 and 1.2500 in the coming months rather than correct more deeply back into the 1.1500 to 1.2000 range that was in place between July and November," MUFG adds.