The pound is gradually moving higher and tackling 1.3000. EUR/USD is looking for a new direction. What’s next?
Here is their view, courtesy of eFXdata:
TD Research discusses GBP and EUR tactical strategies and prefers GBP Long exposure via options, while remains a dip buyer of EUR/USD ahead of 1.13.
“The stabilization of Chinese growth data offered little support to the price action, though signs that stimulus kicking-in would be beneficial to the rebalancing of capital flows that have favored the US. The prospects of a US/China trade deal would also reinforce a positioning squeeze to the benefit of the higher-yielding camp,” TD notes.
“Brexit also remains top of mind, as May tries to lay out her Plan B option. For GBP, our bias leans higher and we prefer options to spot given the scope to price out the skew. The ECB will also capture some attention this week, where we think pricing is too dovish. We remain EUR dip buyers ahead of 1.13,” TD adds.
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