Forex. Moring Update
EUR/USD is still vulnerable to the downside even in the short term, and we look for it to make a renewed challenge on the 17 May low of 1.2235 in the coming days with extension to 1.1825 Elliott wave projection from the move starting December 2009.
Medium term (beyond 1 month)
- We retain our stance of being more bearish than consensus on EUR, now targeting 1.15 by year-end 2010 against the USD, and 0.8000 against GBP.
- It may be a little early to re-enter (see above), but the expected short-term retreat in AUD/JPY and NZD/JPY will soon provide good opportunities for medium-term upside plays.
- Alternatively, one might try to side-step the vagaries of commodity markets by going long CAD/NOK, capitalising on Canada’s healthier neighbour and larger rate hikes.