Currency Analyst since 2010

How will banks trade this week?

Morgan Stanley closed EUR/USD and GBP/USD shorts from $1.3450 and $1.6060 at $1.3500 and $1.6100 respectively. The bank remains bearish on EUR and expects the move below $1.3420 to signal a decline towards $1.3300 and probably $1.3215. As for cable, MS is bullish now and set a buy limit at $1.6050, with a target at $1.6300, and a stop at $1.5980. In addition, the strategists took profit on AUD/USD short from $0.9520 at $0.9390 (initial target lay at $0.9100).

Citi is prepared to sell EUR/USD on rallies as they think the single currency will stay vulnerable ahead of the ECB’s December meeting. The bank also points out that the RBA officials may once again try to talk Aussie down this week.

Nordea Markets is, on the contrary, rather positive about euro. The specialists believe that once EUR/USD settles above $1.3515 returning to the uptrend channel, it will head to new highs within afew months. Nordea closed the GBP/USD short and will reconsider selling only in case of a move towards $1.5850. The analysts also propose re-entering USD/JPY short below 99.50. The bank closed AUD/USD short last week at a profit, but remains short on NZD/USD. As for USD/CAD, a close at 1.0420 will make them position for a potential reversal to 1.0300/1.0280 area.


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