When is the best time of day to purchase EUR/USD and what is the short-term forecast for the pair?
Here is their view, courtesy of eFXdata:
Bank of America Global Research performs time zone analysis of USD pairs using granular 3-hour segments, and notes that EUR/USD started trending higher during the key 2-5pm (London) hours with more upside to go.
“The flows had reversed since the beginning of the year, with UK and Asia investors reducing USD shorts by buying US dollars, while US investors largely staying on the sidelines. In terms of relative conviction, Asia was less active than UK and US investors in terms of USD/EUR returns,” BofA notes.
“We also underscore that the 2-5pm (London) flow had turned in favor of selling USD (buying EUR) over the last two weeks, capturing recent momentum, in line with our short-term bullish EUR signals. The risk to this view is that EUR remains a low-yielding currency when investors are seeking yield,” BofA adds.
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