MUFG trade of the week: Sell EUR/AUD
Trade idea from Mitsubishi UFJ
MUFG recommends selling EUR/AUD with a target of 1.5900 and a stop at 1.6700. The pair closed the week at 1.6333.
"We are recommending a short EUR/USD trade idea to reflect in part the recent divergence in the spread of COVID-19 which will have implications for relative economic performance going forward," analysts note.
"New COVID cases have increased sharply in Europe in recent weeks which are increasing pressure on local policymakers to re-impose tougher restrictions on activity. Risks of a more significant slowdown in European growth heading into year-end are rising. In contrast, COVID cases remain more contained in Australia and China."