Sell EUR/USD for the target of 1.0950 – Westpac

The research team at Westpac recommends to go short on the EUR/USD pair with the following parameters:

Entry: Sell 50% at 1.1200, 50% at 1.1230, Stop: 1.1305*, Target: 1.0950.

Key Quotes

“Rationale: 

Sell into rebounds

• Yield spreads are now retracing from their EUR supportive stance of recent weeks
• Positive European political events are now fully priced in and the realities of both Macron implementing reform and EU-27 negotiating Brexit are likely to become more problematic
• EUR (IMM net-levelraged) positioning is back to (small) long for the first time since 2Q'14 
• Hard data releases are light into the end of the month and the slip in Germany's ZEW expectations could start to weigh on the recent outperforming Flash PMI's this week
• USD may remain vulnerable but it is stabilising as US yields rebound from last weeks spiked low.”