In opinion of Senior FX Strategist at Rabobank Jane Foley, the pair could retreat to the 1.08 area in the medium-term. Key Quotes “Positioning in both the USD and the EUR has reached an interesting juncture”. “CFTC speculators’ positioning data suggest that over the past year or so USD longs have been pared back to the levels that existed ahead of the surge that started in 2014H2. Simultaneously, the extraordinary level of EUR shorts that was built between July 2014 and March 2015 has also now been reversed”. “The implication is that the downside potential in EUR/USD may now be easier to achieve. While the very dovish position of the ECB could weigh on EUR/USD going forward so too could expectations regarding further tightening from the Federal Reserve this year”. “Earlier this year the market had all but priced out a Fed rate hike this year. That said, in recent weeks comments from a variety of Fed officials have given rise a decent level of two way trade as to whether a 2016H1 hike is likely”. “It is our view that the Fed could hike rates again in June and we see the potential for EUR/USD to edge down towards 1.08 on a 6 month view”. For more information, read our latest forex news.