- EUR/USD upgraded to Neutral

- Eurozone economy exiting covid crisis with conviction

- EUR/USD about to break descending trend line

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The Euro's recovery against the Dollar could become more entrenched according to analysis from Swiss investment bank Julius Baer whose technical analysis team has upgraded their rating on the EUR/USD from Bearish to Neutral.

Technical analyst Alexis Chassagnade says "a break above key resistance confirms the bottom in our long-term momentum indicator. We recommend closing shorts and have upgraded our rating to Neutral."

The Euro has been recovering against the Dollar since a March 23 low of 1.0646 was recorded at the height of the coronacrisis market meltdown.

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The subsequent market recovery has aided the Euro higher at the expense of the safe-haven U.S. Dollar while economists are increasingly saying there are signs that the Eurozone economy emerges out of the crisis faster and stronger than the U.S.

"We have become more constructive on the Eurozone economy, under the assumption that the COVID-19 pandemic remains under control and data continue to improve," says Jen Licis, Economic Analyst at Wells Fargo. "The prospects for the Eurozone economy have become more encouraging as COVID-19 case growth continues to stabilize and activity and confidence indicators point to a less severe decline in Q2-2020 than we previously anticipated."

With the covid-19 pandemic under control in the Eurozone, focus has turned to the U.S. where infection, hospitalisation and deaths continue to rise. "The economic effects of the pandemic are very grave in the US too and it will yet remain to be seen who will emerge better from the crisis, the US or Europe. And in the end the US dollar’s rate advantage is only marginal now and therefore not a major argument in favor of the greenback these days," says Antje Praefcke, FX and EM Analyst at Commerzbank.

This fundamental underpinning has aided the EUR/USD exchange rate from a technical perspective according to Chassagnade:

"The EUR/USD is attempting to break a key resistance area located between 1.1495 (9 March high) and 1.1422 (10 June high). This is an important zone because it corresponds to the descending trend line from 2013 that typically capped short-term strength in the EUR/USD. Due to the fact that our long-term momentum indicator has also bottomed and is presently rising, we have upgraded our rating from Bearish to Neutral and recommend closing short positions on the EUR/USD."

A break above the trendline would signal that the long-term multi-year downtrend is waning and that a multi-year period of appreciation could be beckoning. However, a failure at the trendline could lead to a subsequent drop and a renewed push lower which confirm the Euro does indeed remain in the grip of a multi-year bout of depreciation.