Short EUR/JPY – Deutsche Bank

Research Team at Deutsche Bank, suggests to go short on the EUR/JPY pair as their G10 trade idea of the week for the target of 115 while entry being at 119.36 and maintaining a stop of 122.10.

Key Quotes

“Euroglut” fixed income outflows from the Eurozone picked up in the autumn and are likely to accelerate further with a widening rate differential. By contrast, Japanese demand for unhedged USD assets has abated at current spot levels. Political and financial stresses in the Eurozone periphery favour a dovish surprise from the ECB in December relative to market expectations, while the yen only stands to benefit from a potential negative shift in the ‘benign Trump’ paradigm. Extreme undervaluation also provides more downside protection for the yen.”