In the view of the analysts at Goldman Sachs, EUR/USD is set to remain in a familiar range between 1.1600-1.1800 over the coming year.

Key quotes

“We now forecast that EUR/USD will remain roughly range-bound over the coming year, reaching 1.16 in 3m and 1.18 in 12m (vs. 1.25 previously). “

“If US inflation falls below 2% next year-e.g., because goods prices decline more than expected-the Fed could remain on hold for a longer period, reopening the possibility of EUR strength vs USD. “

“Despite a stronger dollar in general, we do expect appreciation vs. USD for certain commodity exporters and select EM and G10 crosses.”

“Moreover, we continue to see structural weakness for the broad dollar, due its high valuation, reduced US asset market outperformance, and new threats to the greenback's international role from the opening of the Chinese bond market and other factors.”