FXStreet reports that while the fundamental backdrop may suggest less reason to buy the safe-haven USD, the market is still long of the EURs and going into next month’s ECB meeting, economists at Rabobank expect that confidence in that position will be tested.

“The combination of cheap money and vaccine hopes is likely to allow for decent levels of risk appetite and, while there are still risks on the horizon, we have curtailed our expectations for another round of USD strength and revised up our three-month EUR/USD forecast to 1.17 from 1.16 and our 6 mth forecast to 1.18 from 1.14.”

“On September 1 comments from ECB Chief economists made it clear that he was concerned about the summer’s rise in the value of the EUR and the rally in EUR/USD stopped short at 1.20. We still see this area as marking strong psychological resistance for EUR/USD and would expect the currency pair to trade mostly in the 1.20 to 1.16 range in the months ahead.”