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EUR/USD spot rate at time of publication: 1.1690Bank transfer rates (indicative guide): 1.1280-1.1360Specialist transfer rates (indicative guide): 1.1585-1.1632Learn more about specialist rates here.Foreign exchange strategists at Credit Suisse have retreated from pursuing a higher Euro against the Dollar, saying an ongoing pullback in the Euro-to-Dollar exchange rate (EUR/USD) has further to run.

Strategists had been engaged in a recommendation for further EUR/USD upside, however a fall below 1.1740 has seen them exit the position and question the validity in maintaining a 1.21 target established for the exchange rate in May.

"For the first time since May, we have decided to shift lower our one-month EUR/USD target to 1.1600," says Shahab Jalinoos, a trading strategist at Credit Suisse, "we are no longer buyers on dips to that level, instead preferring to wait for a more discretionary opportunity to engage."

The EUR/USD exchange rate topped out at 1.20 on September 01, a date that saw the European Central Bank's Chief Economist Philip Lane warn the market that the central bank was wary of the exchange rate's appreciation. Commentators said this suggested 1.20 to be a line in the sand for policy makers.

Credit Suisse says what matters is not so much the merits of the argument of whether the Euro is overvalued around these levels, but rather that the central bank has successfully instilled a sense in the market that upside is now capped at levels above 1.20.

This will be a hard nut to crack in the future.

However, and perhaps more importantly, September 01 marked the start of a troubled month for global equity markets that saw a multi-month rally hit the buffers. A retracement in global equities has meanwhile seen the U.S. Dollar bid, confirming the Greenback's 'safe haven' credentials remain intact.

The Dollar's comeback has in turn pressure the Euro-Dollar lowered and lead market participants to recalibrate their approach to the pair.

Jalinoos says one reason for stepping back from the Euro-Dollar 'long' trade was the looming November Presidential election, "an event that generates uncertainty sufficient to prompt positioning washouts".

From a domestic perspective, Credit Suisse note the resurgence of covid-19 infections across Europe as another reason to step back.

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Indeed, the impact of the rise in covid-19 cases was clear to see in September's flash PMI data, which showed the bloc's services sector actually shrunk, bringing to a screeching halt the summer recovery.

With cases rising, and the potential for further restrictions lying ahead, Eurozone assets might have lost their previous appeal.

"With European countries seemingly more willing to lock down to pre-empt numbers reaching unacceptable levels, the risk is that a sustained rise in countries like France over the next week or two forces economists to downgrade further their growth forecasts," says Jalinoos.