"The overall level of activity in the eurozone is very weak, something that ECB speakers (including board member Constancio on Thursday) have been very keen to emphasize. We continue to see risks skewed towards further policy easing from the ECB, in contrast to the exit-focused Fed, and we remain short EURUSD as a trade recommendation," BNPP outlines its current macro-bias on the pair.
Meanwhile, BNPP added a fresh short GBP/USD position to its macro trade recommendations targeting a move down to 1.5330 with a stop set at 1.6310.
"A run of strong data and firm UK front-end rates have supported the GBP this month, but our STEER™ framework suggests GBPUSD is now very rich to short-term drivers (see chart) and our BNP Paribas FX Positioning Analysis indicates long positioning in Sterling is now very stretched. We think some combination of UK data disappointment, US data improvement, and dovish BOE messaging is likely to undermine GBPUSD in the weeks ahead and that risk-reward is attractive for new shorts at current levels above 1.60 heading into important data next week," BNPP says as rationale behind this call.
Read More: http://www.efxnews.com/story/20937/stay-short-eurusd-against-13730-sell-cable-against-16310-bnp-paribas
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