EUR looks indecisive - Westpac

Richard Franulovich, Research Analyst at Westpac, suggests that the EUR looks indecisive here (1.1330) as it ambles inside a 1.11 to 1.15 range.

Key Quotes

“More inclined to buy dips for a run to the top of that range in coming weeks though. Many dismissed the Eurozone’s strong Q1 growth outturn as a flash in the pan but late Q2 growth signals have been constructive, including 9mth highs in the June ZEW expectations sub-index, solid German exports, IP and PPI data. A meaningfully more dovish medium term Fed policy guidance via the dots likely morphs into a bigger drag on the USD post the UK referendum too.

GBP has risen 3%+ on a TWI basis from last week’s lows but history warns of more upside. After the Sep 2014 Scottish vote and the May 2015 general election GBP not only rose back to the highs that prevailed in the 10-20 days ahead of these votes but slightly exceeded them. Similar dynamics should see EUR/GBP down another 1.7% while GBP vs the likes of AUD, CAD and NZD would have 3%+ upside potential.”