Market getting carried away with bullish USD calls
Now every so-called analyst is trying to out-do his/her peers with bullish USD calls. In the last 24 hours I’ve read that EUR/USD is headed for 1.22, Cable is going to 1.50, USD/CAD will be at 1.17 in 10 minutes, and USD/JPY should be closer to 150 than 105.
What a load of rubbish. The market is getting overly excited after a period of extreme doldrums but I don’t see this continuing much longer.
- EUR/USD at 1.22 is probably the one forecast that I might buy into. The ECB have set their policy and it will only get easier in coming months, so there is no reason to be long EUR.
- Cable back to 1.50? Sorry, I can’t see it. Once this referendum is out of the way and the uncertain period is behind us, then the GBP will be back in vogue again. I’m staying patient but I will buy when I think the time is right.
- USD/JPY: I wrote earlier this year that the ‘trade of the year’ could well be to wait for this pair to reach 110/112 and sell into that area. Of course we need to see how the market reacts when it gets there (and it probably will) but we now have an already long market getting longer.
- My bias remains towards buying AUD/USD around .9150 and/or selling USD/CAD around 1.1050/1.1100 and I remain committed to these levels for now.