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17 Sep 2013
Flash: EUR/USD to target 1.3450/1.3500 if Fed disappoints - Westpac
FXstreet.com (Barcelona) - According to Westpac Global Strategy Team, any soft tapering by the Fed on Wednesday, which should involve a reduction of QE of no more than USD 10/15 billion, combined with a disappointing Bernanke press conference, should result on EUR/USD targeting 1.3450/1.3500 amid broad USD weakness.
Westpac adds: "However, Germany’s federal election looms on Sunday, should cause some caution on EUR as Chancellor Merkel seems in danger of losing the FDP as coalition partner, producing policy compromises with a new coalition. Our multi-week bias is to sell rallies on likely growth divergence, with much of Europe’s "good" economic news probably already behind us."
Westpac adds: "However, Germany’s federal election looms on Sunday, should cause some caution on EUR as Chancellor Merkel seems in danger of losing the FDP as coalition partner, producing policy compromises with a new coalition. Our multi-week bias is to sell rallies on likely growth divergence, with much of Europe’s "good" economic news probably already behind us."