FX week ahead: Portfolio remains light on risk– JP Morgan
|Heading into a new week, analysts at JP Morgan offer their outlook on the major currencies, in light of a relatively data-thin macro calendar.
Key Quotes:
“Portfolio remains light on risk.
Slight defensive tilt to navigate protectionism-related uncertainty
Maintain a modest USD short vs. other reserve currencies like CHF.
Keep selective high beta shorts expressed via AUD and NZD versus the Euro.
Oil is re-emerging on macro radars as a potential petro-FX catalyst, stay tactically long NOK/SEK and short EUR/NOK.
CAD is on the watch list as a potential buy given the better tone to NAFTA negotiations.
Technical Strategy:
The range bias for the USD indices persists following this week's failure at key resistance.
The breakdown in USD/JPY reasserts the medium-term downtrend; the backdrop for Antipodeans continues to deteriorate.
Stay long:
NOK/SEK, USD/HUF, USD/CZK, USD/NOK, JPY/KRW, USD/KRW, USD/CAD and USD/ILS & short PLN/HUF, GBP/CHF, AUD/CHF, USD/CHF and NDZ/USD.”
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