Risks are in Favour of a Topside Break in EUR/USD - Westpac
Risks are in Favour of a Topside Break in EUR/USD - Westpac
Richard Franulovich, Research Analyst at Westpac, suggests that the
risks are in favour of a topside break in EUR/USD as markets embrace a
more risk averse posture not to mention the weaker underlying USD signal
delivered by Chair Yellen’s decidedly dovish speech last week.
Key Quotes
“Would
prefer to sit out gains beyond 1.15 though and EUR/USD shouldn’t trade
north of 1.17. The well-worn theme of EZ-US growth and policy divergence
should reassert in due course.
GBP likely remains a laggard
regardless of the risk appetite backdrop, especially as we move closer
to the EU membership referendum 23 June. A return to sub-1.40 looks
imminent. Even if the polls break sharply toward “Bremain” hard to see
GBP unwinding its Brexit premium until the certainty of the vote is out
of the way.
Sensing a deeper pullback for EUR/ CHF may be in
order, to lows nearer 1.05/1.06, levels not seen since Aug 2015. Key
near term weights are Brexit risks, not to mention signs from our global
risk appetite indicator that the run up in risk assets is now very well
advanced.”
(Market News Provided by FXstreet)
