EUR/USD a sell into 1.12 – Westpac

Strategist at Westpac Richard Franulovich has recommended selling spot on upticks towards the 1.1200 handle.

Key Quotes

“Political contagion risks run high in the year ahead with Italy’s referendum on senate reforms Oct 2016, Dutch elections Mar 2017, French Apr-May 2017 and German Sep-Oct 2017 all carrying high risks of a strong rebuke by Eurosceptics”.

“EUR a sell into 1.12 and likely trades lower into year’s end (sub-1.10). Hard to see EUR testing and breaking key 1.0450-1.06 support though – the Zone’s current account surplus has stymied EUR downside on numerous occasions when the integrity/fabric of the single currency has been threatened and could well do so once again”.