Rabobank - "Our medium-term target for EUR/USD has stood at 1.3500 for some time. As long as risk appetite holds we continue to expect the EUR to remain well supported and the USD to remain on the back foot suggesting there is scope for an upward revision to our forecast. That said, we continue to warn that there is scope for pullbacks. In the year as a whole we expect the Eurozone to be unable to produce any growth at all. While there is plenty of opportunity for economic data to provide disappointments this year, another test for risk appetite could be the forthcoming Italian elections. Opinion polls are currently suggesting that former PM Berlusconi may garner sufficient support to take control of the Senate which could complicate the process of reformist legislation. Another test for investor confidence is risk of a step up in the levels of hawkish comments from the FOMC, (though we do not anticipate that the Fed will step away from QE until Q4 2012). In summary, the EUR may hold a losing hand in the currency wars, but there are plenty more battles still to be had."