Bank of America assumes euro might correct to May lows this summer

Experts at Bank of America Securities have closed their long position on the euro-dollar pair, opened April 10 with an initial target at $1.15, which was later raised to $1.19 on April 22. The experts cited geopolitical risks in the near term as the reason for closing the deal.

However, analysts at Bank of America Securities keep a bearish stance on the dollar and forecast the euro to reach $1.17 by the end of the year. Still, in the short term, geopolitical tensions create risks for the European currency as well, they believe.

The bank's experts noted the prevailing negative market sentiment towards the dollar and the market being generally long regarding the euro-dollar pair. But the experts of the organization believe that in case of further escalation of tensions in the Middle East, a negative scenario for the euro is not excluded.

They also drew attention to the historical pattern, according to which the last third of the euro rally is usually more unstable. Should this trend be confirmed this time as well, the experts believe that the eurozone currency may correct this summer to the levels just above $1.1065.