FXStreet (Bali) – Nomura’s Global FX Strategy Jens Nordvig sent a note to clients on June 11th, noting they are selling EURUSD at 1.122 with a stop at 1.1450, with a target of 1.09.
Key Quotes
“Since early May, we have been re-engaging in long USD exposure (after being flat after the March FOMC), but have recommended long USDJPY and short AUDUSD rather than any EURUSD exposure. At this stage, however, we think the time is right to re-engage in the short EURUSD downtrade.”
“First, US data is clearly improving. Two of the month’s important data points in the monthly cycle have both been significantly better than expected. On Friday, it was NFP. Today, it was retail sales.”
“Second, the FOMC is likely to clearly keep September lift-off on the table when it meets next week. After better data momentum, the text of the statement is likely to sound more confident, and the dots are likely to signal that a two-hike scenario in 2015 is still the central case.”
“Third, the bund market has corrected forcefully. It is tricky to call the top in yields, obviously, given the technical nature of the moves. But we think there is a decent chance that buyers will emerge around the 1% level in the 10-year bund.”
“Fourth, we don’t think developments around Greece will have a major influence on the EUR FX rate.”
“Fifth, positions in the Euro have been reduced (although not as much as other USD crosses), and if the momentum is in the right direction, there will be plenty of investment managers who will go with the trend.”
(Market News Provided by FXstreet)