Key reasons for staying out of long EUR/USD trades

EUR/USD down 72 pips to 1.2034 today

EUR/USD down 72 pips to 1.2034 today

Credit Suisse discusses discusses the USD outlook and why they don’t like long EUR/USD positions in the near-term.

The rise in long-term US Treasury yields has yet to lead to a
major breakout in favour of the USD against a broad range of currencies
far, global equity markets have shown relatively little reaction to the
latest jump in nominal and real yields, unlike in January. As for Fed
reaction, comments made so far this week have done little to signal an
imminent move is likely to stem the rise in long-term yields. This
fairly sanguine view at the Fed leaves open the possibility of a much
bigger rise in US rates down the line, one not matched by the
negative-yield blo
c,” CS notes. 

“This is a key factor behind why we are not currently advocating long positions in the likes of EURUSD, even if we have felt inclined to own the high-beta G10 and the EM bloc against the greenback. It also leaves open the possibility of USDJPY testing 106.50 – our expected range high for Q1,” CS adds

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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