EUR/USD: What's Next For Market's 'EUR-Phoria'? - Nordea

Nordea Research discusses EUR/USD outlook and notes that the market’s euphoria (or EUR-phoria) is clearly evident in FX markets.
"One of the places where the EUR-phoria is obvious is in speculative positioning in the EUR. The long positioning in EUR is record-high and the Euro area’s earlier worries have all been forgotten...
Markets are indeed getting carried away about the prospects of an ECB to hike. Once the market realizes that the ECB will not turn hawkish as quickly as anticipated, it should help lead EUR/USD back towards the 1.17-1.18 area in Q1-Q2," Nordea argues. 
"The bottom-line is that while we share the market view that EUR/USD has more structural upside potential, we think it is premature to expect the next round of material EUR strengthening to be just around the corner," Nordea concludes.