On the daily chart el EUR/USD looks "Slightly Bearish" and "Overbought". A decline towards 1.2200 zone seems more than probable. "In addition to increasing the incentive to diversify into higher yielding assets, the ECB’s policy move yesterday reduces the incentive for investors to move away from their long USD positions," comments the Rabobank analyst team.
"This reinforces our view that there is risk of dips back towards the EUR/USD 1.22 area in the weeks ahead and also increases the chances of more sustained weakness in the EUR."
"That said, for the time being we retain a view that the USD will weaken medium-term," continues the bank research. "This, however, assumes that the Federal Reserve will maintain an extremely accommodative position on policy for an extended period."
Rabobank's EUR/USD forecast: 1M: 1.22; 3M: 1.25; 6M: 1.32.