19 May 2015
EUR/AUD: Near term risks to the upside - Westpac
FXStreet (Bali) - Sean Callow, FX Strategist at Westpac Global Strategy Group, notes that near term risks on EUR/AUD appear to lie to the upside.
Key Quotes
"Near term risks on EUR/AUD appear to lie to the upside, with AUD lacking clear fundamental catalysts for outperformance while lopsided EUR positioning should provide fuel for at least temporary further EUR gains."
"This combination should see EUR/AUD rise to 1.46 multi-week, perhaps even as far as 1.48. However, multi-month, unrelenting ECB QE should eventually catch up with EUR once more, helping calm the recent squeeze led by German bund yields."
"Downside could then extend to 1.38. Both AUD and EUR should head lower versus USD into Q3, limiting the width of trading ranges."
Key Quotes
"Near term risks on EUR/AUD appear to lie to the upside, with AUD lacking clear fundamental catalysts for outperformance while lopsided EUR positioning should provide fuel for at least temporary further EUR gains."
"This combination should see EUR/AUD rise to 1.46 multi-week, perhaps even as far as 1.48. However, multi-month, unrelenting ECB QE should eventually catch up with EUR once more, helping calm the recent squeeze led by German bund yields."
"Downside could then extend to 1.38. Both AUD and EUR should head lower versus USD into Q3, limiting the width of trading ranges."