Forex Insider Daily Update 12 June 2017

Major Bank Daily Position

AUD/USD - UOB - LONG Limit Order - Adjusted - Stop from 0.7470 to 0.7495, Entry: unch., Target: unch. (S/T)

USD/CAD - Citi - SHORT Limit Order - Placed - Entry: 1.3450, Target: 1.3150, Stop: 1.3600 (TOTW-M/T)

USD/CAD - Citi - SHORT Limit Order - Filled - Entry: 1.3450 - Target: 1.3150, Stop: 1.3600 (TOTW-M/T)

Barclays

Barclays expects the Fed to raise the target range for the federal funds rate by 25BP to 1.00 – 1.25% at its June meeting this week.

Although some details may be lacking, we expect the message on balance sheet policy to be clear, consensus has been reached and runoff is likely to begin soon.

Given our expectation of a rate hike in June and balance sheet run off in September, we find it unlikely that the Fed will deliver a dovish message on the outlook.

Trade Of The Week: Short USD/INR

“We recommend short USDINR NDF targeting 64.15 (ref1m NDF:64.6, SL 64.8). INR is one of our favourite carry currencies, supported by positive investor sentiment, on going reforms, improving trade data and low volatility. We do not expect any upset to risk sentiment by Fed this week, which should bode well for high yielders.

“A less hawkish RBI, improving trade data and no upsets to risk sentiment by the Fed should support INR, while we think market is underestimating the likelihood of a 50bp cut in Russia.

SocGen

EUR/USD has taken hape at the down slanting channel support at 1.035

“The pattern’s validation level stands at 1.086/1.08 which also coincides with multiyear graphical levels.

Thus, EUR/USD looks poised to head higher initially towards the down channel’s upper band at 1.146, also the 2015/2016 highs and 23.6% retracement of the down move since 2011 peak.

It is then set to move towards 1.1685/1.1714, the August 2015 high and the 23.6% retracement of the entire cycle. Graphical levels at 1.1875/1.2043 will represent a key hurdle ahead.

CIBC

CIBC notes that while EUR has rallied this year, it didn’t get any help on that path from the ECB this week.

“While policy makers are no longer suggesting rates could be cut again, there weren’t any signals towards tapering QE later in the year or rate increase in 2018. However, we still see the EU economy progressing well, which will enable a reduction of stimulus later this year or early 2018,” CIBC adds.

“As such the recent pullback in EURUSD should reflect better values for long positions to be reestablished, as we see it rising to 1.18 by end 2018.

BNPP

Trade Of The Week

We recommend to short AUDUSD because we think USD could rally this week as markets will refocus on Q2 economic data and medium term picture.

Our economists think the language on the balance sheet is likely to change at the Fedmeeting, setting up a formal balance sheet reduction announcement in September.

Citi

Trade Of The Week

Citi recommends selling USD/CAD around 1.345 targetting 1.315 with a stop at 1.36