The euro is expensive, but buy the dips -- TD
TD on the euro
TD FX Strategy Research notes that its high-frequency fair-value model shows that EUR is the most expensive currency in G10.
"It has been trading at a 1-simga premium since late June and has been pushing the 2-sigma level since the end of July. Our preference is to buy into (if we ever get one) EURUSD dips, especially on a downside break towards 1.15," TD advises.
For now, TD is looking to short EUR/JPY given the risks to a more pronounced squeeze in the majors.
"For EURJPY, we look for a move lower towards the 125.8/126.10 pivot, which is an area that we think offers strong near-term support over the coming weeks," TD projects.
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