UBS expects the EUR/USD currency pair to steadily advance toward the 1.20 level in the months ahead and then settle around that mark, according to a report published on Monday by UBS.
In its latest currency outlook, the bank noted that EUR/USD has been moving within a relatively tight range between 1.15 and 1.19 in recent months. This sideways price action reflects a balance of supportive and negative economic forces on both sides of the Atlantic, which have largely offset one another.
UBS analysts continue to hold a bearish view on the U.S. dollar against the euro, arguing that ongoing dollar weakness should gradually lift the pair toward the 1.20 area, where it is expected to find medium-term stability.
The bank also highlighted several factors that could drive EUR/USD beyond its 1.20 projection. Among the key upside risks are geopolitical developments as well as monetary policy decisions linked to the Federal Reserve, which could further pressure the dollar.
At the same time, UBS cautioned that its forecast is not without risks. The report warned that stronger-than-anticipated U.S. economic growth could support the dollar and potentially push EUR/USD below the 1.15 support zone that has held in recent trading.
