MUFG trades of the week: Sell EUR/JPY and GBP/NOK
Mitsubishi UFG with a pair of weekly picks
MUFG is out with its weekly trade for the coming week, along with a carryover from last week.
Up first is selling GBP/NOK with a target of 11.200 and a stop at 12.000.
"We are recommending a short GBP/NOK trade idea. We still believe that there is scope for the GBP to weaken further to price in even more NO Deald Brexit risk. GBP weakness on teh back of Brexit fears are far from as extreme as last summer... A NOK rebound appears more likely than a GBP rebound right now," they write.
They also maintain a short EUR/JPY trade with a target of 122.80 and a stop at 127.20.
"We are maintaining our short EUR/JPY trade idea. We continue to believe that the EUR remains vulnerable to a deeper correction lower in the near-term. According to our yield-based valuation model, the EUR has become significantly overvalued. At the same time, bullish sentiment and positioning has become extreme.. the JPY could benefit from heightened political uncertainty in Japan and the risk of a deeper correction for highly-valued US tech stocks," MUFG writes.