USD/CAD Hgher, EUR/USD Lower Medium-Term - Bank of America Merrill

Market news

11 August 2016

USD/CAD Hgher, EUR/USD Lower Medium-Term - Bank of America Merrill

"Despite the very strong NFP report on Friday, this did not translate into USD buying either over the week in total or on Friday itself from hedge funds or real money clients. Indeed technicals do not yet signal a reason to broadly buy USD.

We remain medium-term bullish USD, and in the near-term still like USD/CAD higher

EUR was sold for the third consecutive week by hedge funds, and we note four weeks of EUR selling by real money clients following a period of EUR buying that has persisted since the end of last year. Strong and persistent corporate EUR selling has abated however.

We like EUR/USD lower in the medium term, but will need to see more priced in for Fed hikes this year to provide momentum".

Options levels on thursday, August 11, 2016:

Expected positive start of trading on the major stock exchanges in Europe: DAX + 0.2%, CAC40 + 0.2%, FTSE + 0.1%

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