4 Sep 2013
Flash: Quick break of 1.30 in EURUSD unlikely - Nomura
FXstreet.com (Barcelona) - Ongoing equity inflows over the past few months are likely to still buoy the euro, even if technicals are starting to point for further weakness in EURUSD, notes FX Strategist at Nomura, Jens Nordvig.
Key Quotes
"Against this background, we believe that a sizeable drop in EURUSD is unlikely until US data pick up more meaningfully (NFP is
likely to be key as usual)."
"There could be a more moderate drop, driven by (long) position unwinding and perhaps some central bank reserve rebalancing after recent reserve drawdowns. But a quick break of 1.30 in EURUSD does not look particularly likely to us in light of current underlying eurozone portfolio flows and a still mixed US data picture."
"With EURUSD having come off from 1.3400 to 1.3160 over the past week, we are looking to reduce implicit short EURUSD exposure in our portfolio (which was embedded in USDCHF). We are closing our long USDCHF (for a small profit of 0.5%). Instead we are recommending long EURCHF at 1.233. The size is USD10mn worth, with a stop all the way down at 1.2000."
Key Quotes
"Against this background, we believe that a sizeable drop in EURUSD is unlikely until US data pick up more meaningfully (NFP is
likely to be key as usual)."
"There could be a more moderate drop, driven by (long) position unwinding and perhaps some central bank reserve rebalancing after recent reserve drawdowns. But a quick break of 1.30 in EURUSD does not look particularly likely to us in light of current underlying eurozone portfolio flows and a still mixed US data picture."
"With EURUSD having come off from 1.3400 to 1.3160 over the past week, we are looking to reduce implicit short EURUSD exposure in our portfolio (which was embedded in USDCHF). We are closing our long USDCHF (for a small profit of 0.5%). Instead we are recommending long EURCHF at 1.233. The size is USD10mn worth, with a stop all the way down at 1.2000."