Balance of risks favours short EUR - HSBC

FXStreet (Bali) - The HSBC FX Team still believe that the balance of risks favours being short the EUR, even with risks of some disappointment at the next ECB monetary policy meeting.

Key Quotes

"While accepting that there is scope for disappointment at the upcoming ECB meeting, we still believe the balance of risks favours being short the EUR."

"The temptation is to anticipate under-delivery by the ECB in terms of the scale and scope of any announced easing, and to assume EUR sharply higher as a result."

"However, even a casual perusal of commentaries shows ECB under-delivery would not be so unexpected, so the boost to EUR may not be that great."

"Secondly, an underwhelming ECB would likely be viewed as merely delaying the inevitable more potent QE, ensuring any EUR spike would be sold. As a result, we recommend:- Trade: Sell EUR-USD @ 1.1830, target 1.1350, stop 1.2050."

Description: Balance of risks favours short EUR - HSBC
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ItemReviewed: Balance of risks favours short EUR - HSBC

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