Add Long EUR/USD on Weakness, Sell GBP/USD - Westpac
Research Team at Westpac, suggests that the GBP/USD remains high on their sell list for another week.
“We sell GBP/USD at 1.4450, stop 1.4610. Doubt GBP has the vigour to punch much above 1.45, if at all into the UK referendum late June. Even if the polls break more convincingly toward "Bremain" it’s hard to see GBP fully unwinding the Brexit risk premium until the certainty of the vote is out of the way. GBP should see a vicious squeeze higher if the event pans out much the same way as the Scottish independence vote and the last UK general election (i.e. strong gains for the status quo, the polls significantly amiss), but that is a trade for another day.
Add a long EUR/USD position on weakness, at 1.1195, stop at 1.1080. The USD backdrop remains challenging, the Fed next week likely to repeat that risks persist and that there is no urgency to move on rates. A key EUR/USD downside risk to watch out for a probable turnaround in the US data momentum in Q2, as has been the case over many years lately after a soft Q1.”