EUR/USD: Longs A Super-Trade In The Month Heading To Fed’s Cut
Nordea Research discusses EUR/USD outlook and keeps flagging long EUR/USD position as the second-best G-10 FX trade in months leading up to the ﬁrst Fed cut, only outpaced by a long EUR/NZD position.
“As we have shown in recent FX Weeklies, long EUR/USD is usually a super trade in the month heading into the first Fed cut. Only long EUR/NZD has a better track-record in to the first Fed cut.
ECB easing is also a done deal now, as Draghi hinted of easing unless the outlook improves (more QE and a rate cut). The outlook will not improve (before 2020), but the ECB usually delivers when projections are updated – i.e. in September (they will ease with a time-lag after the Fed),” Nordea notes.
NZD/USD: Triple Bottom; Risk Of Further S/T Squeeze
NAB discusses NZD/USD technical outlook and flags a scope for further gains in the near-term ahead of 0.6680.
“The break of previous 2019 range lows at 0.6575/80 delivered a test towards our one-month target (low of 0.6482), however this indecisive downside breakout has now completed a triple bottom, highlighting strong support at 0.6480/00,” NAB notes.
“ST momentum bias has shifted to positive, confirming further short squeeze risk. MT momentum has shifted to a neutral bias confirming a necessary pause in the well-established downtrend. We anticipate a short squeeze being capped in the May/June 0.6480/0.6680 range before the MT downtrend again takes hold,” NAB adds.