EUR/USD fade the upside to 1.1150-1.1200 – Westpac

Richard Franulovich, Chief Currency Strategist at Westpac, recommended selling the pair on occasional upticks to 1.1150-1.1200.

Key Quotes

“EUR/USD continuing to closely hug 1.10 but should make a clean break lower to 1.08 soon enough, amid ongoing postBrexit diversification flows, elevated political risks as terror attacks across the Zone play into the hands of Eurosceptic forces and likely further firming in Fed tightening expectations through August, guided higher by more upbeat Fedspeak through the month”.

“Fed Sep tightening expectations are stuck at around 25% but can firm to nearer 35-40% in coming weeks before they stabilise”.

“The ECB does not appear to be in any rush but likely modest staff growth and inflation downgrades postBrexit at their 8 Sep meeting may well give an opening for fresh easing measures, a formal extension of QE past March 2017 being low hanging fruit”.