EUR/USD trades around the 1.07 level. However, economists at Commerzbank believe that the shared currency is unlikely to rise further as it is difficult to imagine a more hawkish European Central Bank (ECB). 

EUR/USD might have bottomed at 1.04

“Admittedly it is difficult to imagine a significantly more hawkish ECB at present. There are economic uncertainties and risks in the eurozone too which could cause the ECB to act more cautiously, in particular in case we might see an energy crisis. That is why I think that the euro might be unable to rise much further after the market has already adjusted its rate expectations considerably.

“In view of the fact that the ECB now wants to act more decisively against price risks, there is a lot to suggest that the euro might have bottomed at 1.04 in EUR/USD.”