Citi with a euro trade recommendation:
Buy EUR/USD at 1.2335
- Citi have a profit target at 1.2600
- & place the stop loss 1.2185
And. these two via Barclays:
The lira's real yield pick-up, amid falling inflation and some optimism on Turkey-West relations makes us tactically constructive on the lira, where positioning is light, in our view. On the contrary, most of the positivity is already in the price for SA local market assets. including the ZAR. Amid generally long ZAR positioning, we see room for further near-term ZAR underperformance.
- We recommend initiating a long TRYZAR spot recommendation (spot ref: 3.1125), initially targeting 3.2710 with stop-loss at 3.0350 (below the recent lows of 3.0406) for a reward-to-risk ratio of c.2:1. (This is an existing trade recommendation)
Also:
- We recommend short USDCNH (spot ref: 6.3294), targeting 6.2557, stop: 6.3788 (2m min and Fibo retracement).
Barclays cite:
- Market sentiment towards the CNY/CNH remains positive despite recent political developments. The subsequent currency and equity market strength after proposed constitutional amendments suggests that investors were encouraged by the prospect of policy continuity and political stability.
- We see Liu He's visit to the US as a sign that China is making efforts to address trade tensions with the US, and we see a low risk of China retaliating through CNY devaluation.
- In addition, we see the CNH as a good alternative to the EUR to position for political uncertainty resolution and a possible, although unlikely, shift in ECB guidance this week. The EUR has the second largest weight of 16.3% in the CFETS RMB index, suggesting a high correlation of the CNY to the EUR given the PBoC's fixings methodology.
BARC note: This trade recommendation is valid from the Wellington open Monday morning to the New York close Friday.
