In the view of economists at Crédit Agricole EUR/USD is overbought and vulnerable.

Downside risks for EUR/USD

“The Euro appears overbought, which could leave it susceptible to any downside surprises from upcoming German ZEW and Eurozone consumer confidence data, as well as updated economic forecasts from the European Commission. Additionally, any confirmations from ECB speakers that most of the tightening is already behind us and terminal rates are in sight, might fail to significantly boost the EUR rate advantage.”

“The recent decline in positive Eurozone economic surprises compared to those in the US indicates potential near-term downside risks for EUR/USD. In addition, FX investors have seemingly already built considerable EUR/USD long positions in recent months, potentially limiting further gains.”