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Forex Flash: EUR/USD pegged at one-month target of 1.2900 – Westpac

FXstreet.com (Barcelona) - Eurozone bond markets are pricing in a great deal of good news in the periphery, or at least skyhigh confidence in the ECB/ESM bond backstop. It is hard to see significant gains from here.

According to Global FX Strategist Sean Callow at Westpac, “We would prefer to be sellers on rallies, retaining our EUR/USD 1.2900 one-month target. Meanwhile, the GBP/USD is still our preferred trade, long from 1.5300. The BoE MPC should be comfortable with current policy settings, doing no damage to sterling, as spec shorts are unwound.

Finally, “The flutter on EUR/ CHF looks to be over, with 1.2150/1.2200 support in the weeks leading up to June’s SNB review.” Callow adds.

Forex: USD/CAD erases gains back to 1.0069/74 area

The USD/CAD failed to proceed towards the upside, easing back after a high at 1.0089. The cross has erased its gains back to 1.0069/74 (Tuesday and Wednesday close) and is still close from April lows at 1.0050. Since April 24 that the market has been tumbling across the chart, from just below 1.0300 to find support at 1.0050, yesterday. Investors will be watching US and Canada trade balance data.
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European markets cautiously higher ahead of the ECB

The German DAX 30 (+0.26%), the French CAC 40 (+0.20%) and the Spanish IBEX 35 (+0.33%) are edging higher ahead of the ECB interest rate decision, while the Italian FTSE MIB is down by -0.44% despite the improvement in Markit manufacturing PMI. The British, Swiss, Norwegian and Swedish major indexes are down as well.
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