Is there still a chance for parity in EUR/USD?

Over the past three weeks bears in the euro suffered a series of strokes. Mario Draghi expressed doubts that rates will be lowered further, data on inflation in the Eurozone was better than expected and the Fed seems to occupy an increasingly cautious position on tightening monetary policy. Against this background, the strong report on the labor market in the US, published on Friday, failed to substantively support the USD.

Despite the unpromising at first sight picture, forex strategists of Goldman Sachs still provide parity in EUR/USD. The bank expect US regulators to raise interest rates in June, giving signal for such intentions after their meeting in April. Until then, the pair will likely remain locked in this range.

Besides monetary policies, however, there are other factors that may outweigh EUR/USD, provoking a sharp decline, but for now investors seem to ignore the dangers, warn from Goldman Sachs.

First, the markets for several months following topic on the possible withdrawal of Britain from the European Union. Political uncertainty undermine pounds, but if the electorate vote in favor of Brexit, this would be a negative factor for the euro as it is likely to appear a sell-off of European assets.

On the other hand, if the UK remains in the EU, the attention will focus on likely raise of rates in the country. In similar developments, from Goldman Sachs expect growth of sterling by about 15% in the subsequent 12 months.

Second, investors seem to have forgotten an old problem on the continent - Greece. The latest news hint of growing tension between the International Monetary Fund, Berlin and Athens. Approaching July 20, the date on which the Balkan country must return ECB 2.2 bln euro. IMF continues with calls for writing off part of the debts. Such a move, however, is politically unacceptable to Germany and other European countries. Greek saga is not new to the market, but the return of the subject in the foreground may impair the attractiveness of European assets in the second half, warn Goldman Sachs.