Sell EUR/AUD for target of 1.4730 - Westpac

The analysis team at Westpac is recommending to sell EUR/AUD cross with the following parameters

“Entry: 100% at 1.5000, Stop: 1.5120, Target: 1.4730.”

Key Quotes

“Rationale:

• ECB Pres. Draghi’s recent message was that the Eurozone still needs extraordinary support from monetary policy, including the use of the ECB’s forward guidance. This implies that current market expectations for a significant change in stance at the upcoming June may be misplaced.
• EUR slipped on news reports that Greece might reject a bailout payment (with limited currency reaction to the subsequent denial) and the possibility of early Italian elections. Given recent positioning, this may show the weaker side of the market.
• Media have become notably too downbeat on next week’s Australia Q1 GDP release. While it does look to have been a soft quarter, the potential risks of a recession are overdone.
• The Aussie should also benefit from the calmer global mood in recently weak domestic equities. The majority of the hit to banks from the recent tax and to miners from should be priced in now. Iron ore should stabilise as rebar steel prices remain steady.”