Analysts at Morgan Stanley remain bearish on the EUR/USD pair, predicting the main currency pair to test 0.9700 on the downside amid a dire Eurozone economic outlook.  

Key quotes

"We turn outright bearish on the EUR and recommend EUR/USD shorts targeting 0.97. The Eurozone outlook is looking increasingly challenged with gas prices rising, growth data softening, and inflation remaining elevated.”

"Risks appear to be rising that European nations may be unable to sufficiently stockpile natural gas ahead of the high demand winter months, which may reduce market expectations for future growth. In the long term (2023+), ECB normalization may reduce fixed income outflows, supporting the currency, but this theme is unlikely to be kicking off anytime soon."