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Forex Flash: Forecasts for this week's central banks policies – TD Securities

Investors will be trading central bank policies this week, including the BOJ, RBA, BoC, ECB, and BoE, among others. "We see all ten central banks unchanged, but our general bias remains for more central bank support of economies", wrote TD Securities analysts, placing a roughly 1/3 chance of any of the following: the ECB cuts the refi rate on softer forecasts; the BoE resumes QE (pending services PMI on Tuesday); the BoC strikes an even more dovish tone in their communiqué than we expect; the RBA preemptively cuts rates this week rather than our call for June; Poland cuts rates 25bps rather an our out of consensus call for them to stay unchanged as their rhetoric suggests they want to at least pause on new forecasts; Banxico cuts rates, as the market is roughly 50% priced for a 25bps cut over the next three months (however we see them unchanged this week after comments from Deputy Gov Sanchez last week suggested no room to cut and we like being short BRL/MXN into the decision).

Forex: EUR/GBP testing lows around 0.8640/45

The pair is trading in the red territory on Monday, dragged lower by the soft tone in both the sterling and the single currency, hovering over 1.3000 and 1.5040 against the greenback, respectively....
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Forex Flash: Bunds eye bullish long-term target of 147.00 – RBS

After meeting last week’s target of 145.00 and consolidating at these levels, Bund prices formed a pennant pattern with the measuring target of 147.00 (“flags fly at half-mast”). According to Technical Markets Strategist Dmytro Bondar at RBS, “We believe this target will be met after a possible correction from the 145.82 resistance, as an opening gap above the previous high brings high chances of the gap being filled and pulling back some of the strength before extending the rally. Resistance is expected at 145.82, 146.00/17, 146.37 and 146.67. Overall, we favor being long to 146.00/17 onto 146.67 and 147.00 on a caveat of a sustained break below 144.70.”
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