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2 Apr 2015
EUR/USD might bounce above 1.10 in the near-term – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities expect the EUR/USD to bounce towards 1.10 and even test 1.13 in the near-term.
Key Quotes
“We are only looking for a countertrend bounce in EURUSD. A breakdown in Greek negotiations pose a risk to this view though it has become commonplace for last minute deals to unfold. Longer-term, cyclical support for a stronger USD remains and expected interest rate differentials will act as an anchor to pull EURUSD through parity sometime by Q4. The obvious risk to this view is that the Fed pushes hikes into 2016 instead of this year.”
“We still view September 2015 as a probable starting point for the Fed but this will be dependent on core PCE inflation sustainably moving towards target.”
“In the interim however, we think there is enough upside for EURUSD to punch above the 1.10 figure in the near-term. From there, a sustainable break higher could also see 1.13 tested at which point we would look to reinitiate EUR shorts.”
“For those that would prefer to avoid direct USD exposure altogether, EURNOK might be an appealing alternative on the crosses. This is also an attractive way to play on the policy outlook as we look for the Norges Bank to ease by 50bps over Q2.”
Key Quotes
“We are only looking for a countertrend bounce in EURUSD. A breakdown in Greek negotiations pose a risk to this view though it has become commonplace for last minute deals to unfold. Longer-term, cyclical support for a stronger USD remains and expected interest rate differentials will act as an anchor to pull EURUSD through parity sometime by Q4. The obvious risk to this view is that the Fed pushes hikes into 2016 instead of this year.”
“We still view September 2015 as a probable starting point for the Fed but this will be dependent on core PCE inflation sustainably moving towards target.”
“In the interim however, we think there is enough upside for EURUSD to punch above the 1.10 figure in the near-term. From there, a sustainable break higher could also see 1.13 tested at which point we would look to reinitiate EUR shorts.”
“For those that would prefer to avoid direct USD exposure altogether, EURNOK might be an appealing alternative on the crosses. This is also an attractive way to play on the policy outlook as we look for the Norges Bank to ease by 50bps over Q2.”