29 Apr 2014
Fade strength in EUR/USD - Westpac
FXStreet (Bali) - The Westpac FX Strategy Team suspects that any EUR strength should be short-lived, as traders price in more verbal intervention against EUR appreciation by the ECB.
Key Quotes
"The ECB is likely to get its wish for a rebound in headline inflation in the Apr ‘flash’ reading on Wed. This should produce a kneejerk EUR bounce."
"But we are inclined to fade strength given strong odds the ECB continues its verbal assault on the single currency."
"The May ECB meeting doesn’t seem likely to produce a policy change but risk/reward on any longs near 1.39 is poor multi-week/month. FOMC this week unlikely to shift our bias too much."
Key Quotes
"The ECB is likely to get its wish for a rebound in headline inflation in the Apr ‘flash’ reading on Wed. This should produce a kneejerk EUR bounce."
"But we are inclined to fade strength given strong odds the ECB continues its verbal assault on the single currency."
"The May ECB meeting doesn’t seem likely to produce a policy change but risk/reward on any longs near 1.39 is poor multi-week/month. FOMC this week unlikely to shift our bias too much."