The firm argues that the euro's upside potential remains intact

Nomura says that while ECB policymakers expressing concern about euro strength may put short-term downward pressure on the currency, it will be difficult to alter the upward trend that is already in place.

"Overall we remain long EUR/USD in cash as the drivers of dollar weakness remain intact."

Adding that there are roughly 9 bps of ECB rate cuts priced in over the next 12 months already, so it isn't as straightforward that the euro "can only go lower".

Other factors pointed out by the firm are the relative strength of the euro area economy, which should be euro supportive, and US election uncertainty to weigh on the dollar.

EUR/USD D1 08-09

Looking at the EUR/USD chart right now, things are looking a little precarious as the pair is threatening to break its recent pattern of higher highs, higher lows. Not only that, there is also the daily trendline support being called into question.

A firm break under 1.1800 could facilitate more selling, especially if the dollar sees more inflows from the selloff in risk assets, with the 1.1700 level a key region for buyers to defend in order to prevent a potentially sharper fall in the pair.