Nato and EU meetings could lift EUR/USD further

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Despite believing the euro is currently overvalued, Bank of America prefers it to the US dollar, Swiss franc and Japanese yen.

Bank of America thinks the EUR could be supported leading up to the NATO and EU summits (June 24-27) especially if defense spending is confirmed. German infrastructure spending might also be expected to support the euro.

The EUR/USD holds above the 20- and 50-period EMAs at 1.1380–1.1360 and is comfortably above the 200-period EMA. The recent pull-back from 1.14930 has eased momentum slightly.

A close above 1.1420 could target 1.1470, then 1.1520. A sustained break below 1.1280 could neutralise the bullish bias.

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