Aug 6 (Reuters) - In its daily note to clients, JP Morgan continued to see a good possibility of EUR/USD reaching 1.2500 this year, and expect it north of 1.3000 next year.
The bank says it's plausible the euro could slow down this summer and enter a multi-week consolidation period, but it doubts a sell-off will exceed 2%.
JPM remains bullish, but with a reduced position, after the recent move, considering it will want to buy into pullbacks. The bank advocates preserving a healthy long, as EUR/USD has shown it can keep going this week. That makes tactically moving to the sidelines, or even reducing to a small core, a risky move from an opportunity-cost perspective.
EUR/USD was last above 1.2500 in Feb 2018 when it peaked 1.2556, with 1.30 not seen since late 2014.
1.20 is a huge option level to contend with first
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(Richard Pace is a Reuters market analyst. The views expressed are his own)
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