Societe Generale is forecasting the ranging market condition for EUR/USD and USD/JPY, short for CHF/SEK and long-term short in GBP/JPY. In the short-term situation: shorts for USD/CAD and EUR/NOK.
- "Market volatility has been elevated following the Chinese FX regime shift and has remained so despite the Fed delaying its rate lift-off. Pressure on risk assets have persisted, and the fragile market sentiment is restraining G3 bond yields, which are in turn constraining EUR/USD and USD/JPY in tight ranges"
- "We like shorts in CHF/SEK as the case for such negative rates in Sweden slowly fades."
- "We like long-term shorts in GBP/JPY as the UK growth rate crests and Brexit risk flares higher."
- "Being short the G10 economies with the biggest current account deficits appeals too. USD/CAD and EUR/NOK are too oil-sensitive to have conviction about here. For choice, we like to be short NOK and CAD in the very short-term."
- "As for EUR/USD, it’s barely worth trading. It fell this week with the VW share price, and having a view on where it goes next is way outside my skill set."