Looking ahead

“I expect a retest of the $1.18 area and for the Euro/dollar to push lower,” says Tim Mazanec, senior foreign exchange strategist at the Investors Bank & Trust. “Although we may be in the very early stages of structural change in Europe, the uncertainty over elections this autumn and other uncertainties, together with low growth, should be bearish for the Euro.”

He points to the $1.1730 area as a medium-term target for traders to monitor. If that level cracks, it could open the door to the $1.12 zone, he says. Dolan also highlights roughly the same area.

“If $1.1750 breaks, the dollar has potential to the $1.1350/1.1300 area,” he says.

On the upside, Mazanec sees the $1.2440 area as key. “The Euro needs to stay below that level for traders to remain confident in the dollar rally,” he says. “Trading above it would likely usher in further Euro gains. So, unless we trade above $1.2440, sell rallies.”

Glassman held the most bullish view on the dollar. “I would not be shocked if the Euro retreated to $1.10 or parity [over the intermediate to longer-term],” he says. “It didn’t make sense that the Euro was rising when that region is under performing everyone. I personally believe it belongs at 50 cents. But, it would take a long time to get there.”