EUR/USD: Headed north? – Westpac
Analysts at Westpac are recommending to go long for EUR/USD pair at 1.1350 levels as they suggest that the USD’s recent pullback, triggered by Chair Powell’s comments that the Fed is flexible and patient, along with weaker PMIs signaling a waning of US growth outperformance, has further to run.
“Upcoming Fedspeak (16 slated this week and next, Chair Powell and Vice Chair Clarida 10 Jan) should underscore market conviction that Fed policy normalisation is not a pre-set auto pilot path.”
“Strong US jobs data allayed slowdown concerns but doubts will persist; Q1 US data tends to systematically underwhelm expectations. Partial US government shutdown is now in its third week, lopping off an estimated 0.15ppts off Q12 growth so far with no clear end in sight.”
“The White House threat to bypass congress and invoke emergency powers to build a wall on the southern border will raise the level of partisan rancour in Washington to new heights.”