CIBC Capital Markets have booked profit on a trade that sought to benefit from the recent appreciation in the Euro against the US Dollar.

A buy on EUR/USD has recently hit target, generating an outstanding 8.90% profit for strategists at the Canadian investment bank.

Their recommendation had been for EUR/USD to rise from 1.1065 to a target of 1.2050.

CIBC made their call back in the spring when EUR/USD was below 1.10; the pair then triggered the entry level for the trade at 1.1065 on May 16.

On Monday, August 28, following the spurt higher in EUR/USD after Janet Yellen's speech at Jackson Hole, the exchange rate finally hit the 1.2050 target.

Despite the extent of the gains, CIBC do not see the move as exhausted and remain bullish the pair, expecting even further upside in the months to come, as a result of their unorthodox view that the European Central Bank (ECB) will start raising the deposit rate - which is currently set at -0.4% - before the middle of next year.

"Expectations of an ECB policy shift have been built into the EUR to a meaningful degree, but market expectations of a deposit rate hike before the middle of next year (at 1bp) are still underpriced," says CIBC strategist Bipan Rai.

Now is not the right time to 'reload' EUR/USD longs, however, said Rai, as the pair appears overbought - rather he would wait for a pull-back to better levels before renewing long positions.

CIBC also see the acceleration higher losing steam in the months ahead as the probabilities steadily increase of the Fed raising interest rates.

Nonetheless, technical evidence appears to back a further push higher from market bulls as the final leg of a pattern called a 'measured move', which is like a zig-zag, ascends to symmetry.

"The technical break higher in EUR/USD has yet to reach its measured move (which we project to be somewhere between 1.2350 and 1.2435) while the pair still remains below fair value (which we project to be somewhere between 1.2500 and 1.3000)," says Rai.

Much hinges on the ECB's approach to policy this autumn as this is the primary market driver for the Euro.

On this point, the next meeting in September could be the moment when the ECB decide to announce a 'review' into their monetary policy, with an official announcement of a gradual deceleration in stimulus - or taper as it is called in the business - in October.

Finally, "discussions of a deposit rate hike are likely to come into sharper relief in early 2018," said Rai.

There are concerns that the European Central Bank might move against the Euro at their September meeting citing the stronger exchange rate's ability to limit inflation and take the edge of economic growth.

However, context is important here.

Historically, the pair is less than halfway between its 2008 1.6038 high and last year's 1.0352 low.

The 5-year average value of EUR/USD is around 1.21 and that may explain why the ECB is not overly concerned about the Euro's level, so there could be some way to go before the ECB flexes the jawbone.