EUR/USD down 17 pips to 1.1110
The Bank of Tokyo Mitsubishi UFJ likes the downside. This is what they had to say in a note today.
"While last week was about increased concerns over the European banking sector and concerns over global growth, this week has seen banking sector fears ease - the Markit iTraxx Europe Subordinated Financial Index has retraced over half of the climb that began in February as fears over funding ease.
The announcements this week on "financial support" for certain troublesome industries in China and the oil production freeze deal between Russia, Saudi Arabia and Iran will go some way to alleviating market risk aversion. That would suggest scope for further declines in EUR/USD next week.
There is little in the way of key macro-economic data releases to fuel volatility and hence the currency pair is likely to be more driven by broader financial market conditions. There are no senior ECB officials scheduled to speak next week either, apart from ECB Council member, Peter Praet, next Friday at 18:30 GMT.
Hence, the current improving financial market conditions lead us to go with a bearish bias on the simple assumption that this bout of improved risk appetite will run into next week," BTMU argues.
In line with this view, BTMU is bearish on EUR/USD going into next week seeing the pair trading in a 1.0950-1.1450 in the near-term.
For bank trade ideas, check out eFX Plus.
