EUR/USD: BNP continues to target 1.06 before the end of the year

"The upward squeeze on the EUR/USD can be considered to be a quite violent one. The only time EUR/USD rose 3% over the past 10 years was when the Fed announced QE in March 2009.

We had anticipated a moderate squeeze following the ECB meeting and have therefore avoided any bearish position until after the ECB. However, the magnitude of the increase seems disproportionate. The theme of monetary divergence between the Fed and ECB remains solid.

We think there is now a good opportunity to sell the euro by the end of the year. Especially if the Fed raises its rates on 16 December. We are targeting 1.06 by the end of the year, which seemed a little too conservative yesterday but now continues to be appropriate in our view," says the BNP bank.