FXStreet (Edinburgh) – Strategist Richard Franulovich at Westpac has recommended selling the pair on strength.
Key Quotes
“EUR/USD continues to hold on the firmer side of expectations, thanks in large part to the ongoing sell-off in bunds”.
“However, historical analogs (the 2003 JGB sell off -off and the 2013 US treasury taper tantrum) suggest that we have finally approached the minimum time frame for thinking about some moderation in the pace of the sell-off, with yields typically stabilising after rising 100-120bp two-three months after they bottomed”.
“EUR gains on multiple crosses in recent weeks should thus begin to moderate, if not reverse”.
“Higher yields and Greek worries should prompt a good pullback in the ZEW survey next week while the FOMC is more likely than not to raise Sep Fed tightening expectations. All told, the mix of event risk next week offers more headwinds than tailwinds for EUR. EUR/USD a sell into the 1.14-1.15 zone”.
(Market News Provided by FXstreet)