Westpac says it's time to short the euro
Westpac 'high conviction trade' added
Analysts at Westpac added a short EUR/USD trade ahead of the ECB decision.
They write in a note to clients:
"Last week's two bearish signals out of three producing a sell on strength order that was filled at 1.0995 (stop at 1.1110). We are wary that Draghi will struggle to leapfrog expectations but any squeeze in EUR is likely to be short-lived - the FOMC statement a week later is likely to sound more hawkish noting that future meetings are "live' and the risks are balanced."
They say to short from 1.0995 with a stop at 1.1110 and don't outline a target.
They have an open trade for long USD/CHF at 0.9945 with a stop at 0.9840. Spot is at 0.9964.
"We remain long USD/CHF, the position opened mid-Feb at 0.9945 (stop at 0.9840). Suspect it won't be long before USD/CHF re-takes parity, sharply lower global risk premia and pressure on the SNB to at least match the ECB when they next meet 17 March giving at least two reasons to fade USD/CHF weakness," they write.