EUR/USD Rabobank targets 1.20 in 12 months amid ECB concerns

Rabobank has issued a bullish forecast for EUR/USD, projecting the pair to reach 1.20 within the next 12 months, representing a significant appreciation from current levels. This forecast suggests a potential 10-15% gain for the euro against the dollar, depending on current spot rates. The projection comes despite expectations that the European Central Bank will attempt to counter excessive euro strength through verbal intervention, commonly known as 'jawboning.' Such ECB communication strategies typically aim to temper currency appreciation that could harm export competitiveness and complicate inflation targets. The 1.20 level represents a key psychological resistance that hasn't been sustainably breached since early 2021. Traders should monitor ECB officials' statements for any attempts to talk down the euro, which could create temporary selling pressure. The forecast implies confidence in eurozone economic resilience and potential dollar weakness driven by Federal Reserve policy shifts or US economic headwinds over the coming year.