22 Aug 2013
Flash: USD shows signs of bullishness in coming week – Westpac
FXstreet.com (New York) - The USD event risk next week arguably does not augur well for the USD with durables orders, consumer confidence and Chicago PMI all likely to underwhelm, while Bullard - seemingly the most cautious on tapering - is scheduled to speak twice next week, notes Sean Callow, a Global FX Strategist at Westpac.
Key quotes
“We however adopt a bullish USD bias for the week. For one, next week’s data is unlikely to overly upset Sep tapering expectations, key short term support levels for the USD index resides close by at 80.5 (roughly 1.3450 in EUR/USD) and US 10yr yields show no hint of topping out.
“Our 1 and 3mth views are unchanged - USD bullish - but we are wary that when the Fed commences tapering it may only be a token gesture and the USD might see an abrupt reversal given how much is priced into US bond yields.”
Key quotes
“We however adopt a bullish USD bias for the week. For one, next week’s data is unlikely to overly upset Sep tapering expectations, key short term support levels for the USD index resides close by at 80.5 (roughly 1.3450 in EUR/USD) and US 10yr yields show no hint of topping out.
“Our 1 and 3mth views are unchanged - USD bullish - but we are wary that when the Fed commences tapering it may only be a token gesture and the USD might see an abrupt reversal given how much is priced into US bond yields.”