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Thread: Eur/usd: signal from rate spread out of sync with spot caution here - credit agricole

  1. #1
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    Eur/usd: signal from rate spread out of sync with spot caution here - credit agricole

    2 Attachment(s) Credit Agricole CIB FX Strategy Research notes that therecent EUR/USD rally stands in sharp contrast with all the muted widening of the EUR-USD 2Y rate spread.

    In addition, CACIB notes thatEUR/2500 rebound is working ahead of the gradual tightening in the OAT-Bund 10Y produce spreadthat has been obvious since the French presidential elections.

    On the flows entrance,CACIB notes that traders have created substantial EUR-longs in anticipation of portfolio inflows in to Eurozone stock markets and unwinding of EUR-funded carry trades as the ECB moves ever-closer to the QE taper.

    We question these inflows can increase EUR, nevertheless, so long as they can be hedged, CACIB argues.

    On the 75000 entrance, CACIB alsonotes that 2500 has sold off more than the current correction reduce in Fed rate hike expectations.

    We anticipate the US growth outlook to boost, political hazards to subside along with the FOMC to keep its outlook for further monetary policy tightening, assisting 2500 to recuperate, CACIB provides.

    On the valuation front, CACIB estimats of the short-term reasonable value for EUR/USD indicates the pair ought to be trading well below 1.08 at current.

    All in all, CACIB advises caution on the near-term outlook for EUR/USD.

    EUR/USD is trading circa 1.1183 as of composing.

  2. #2
    So I 'm going for short

  3. #3
    Quote Originally Posted by clonaciones
    So I 'm heading for short
    Be careful.. (Not that I know significantly)
    However IMHO the CA analysis is credible... and technically we do appear to be getting to ranges of significant resistance on the Daily... so perhaps you're right..

  4. #4
    Well, if their analysis is excellent then why their trading is negative? Heard about about this a couple times.

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