EUR/USD is up 5 pips to 118.42 today
Bank of America Global Research discuses EUR/JPY outlook and recommends going short via buying 3mth 117/113 put spread in 1x1, using spot ref 118.5, trade costs 1.18% EUR.
" We are selling EUR/JPY : We believe JPY will be supported by domestic flow, potential success in containing COVID-19, and the BoJ ' s lack of ammunition , while EUR would be undermined by the COVID-19 outbreak in Europe and as unwinding of EUR-funded carry trades may have run its course. Essentially, we are expecting JPY/USD and EUR/USD correlation to break," BofA notes.
"Risks to the trade
are
mor
e-
than
-
expected
"
unofficial intervention
"
by Japanese public institutions, such as
the
Government Pension I
n
vestment Fund (GPIF)," BofA adds.
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