📝See EUR/USD Rising to 1.20 Given Positioning: J.P. Morgan FX Strategy

But we expect these overshoots to persist given the re-think around the US macro outlook and pencil in a 5% premium above fair value to account for this regime shift. Another way to consider the upside is to consider how much EUR/USD could strengthen if we continue to price in more relative optimism in the currency in a manner that takes us to peak long positioning. A level of 1.20 seems quite achievable if longs in the euro continue to accumulate; as Figure 13. shows, historically positioning build up to the peak from current levels has led to double-digit strengthening in the euro so by this measure, our year-end targets of 1.20-1.22 might even be considered too tame. - J.P. Morgan FX Strategy