Economists at Barclays Research see scope for further upside in the EUR/USD pair.

Ongoing policy normalization by the ECB supports medium-term EUR upside

“A faster exit from zero-COVID in China and a maturing tightening cycle for the Fed, given signs that US inflation is peaking, imply more upside for the EUR in 2023.” 

“By our estimates, there is an additional 3-4% upside potential in EUR/USD from China’s reopening alone, which however seems to be on hold given geopolitical concerns surrounding the China-Russia rapprochement.”

“Upside risks to energy prices from geopolitics and China’s reopening have yet to materialize. Ongoing policy normalization by the ECB also supports medium-term EUR upside, notwithstanding some ambiguity in February’s message.”