Institutional trade recommendations

Bank of America Global Research discusses the USD technical outlook and favors tactical USD longs in the near-term.
"Our bullish USD bias has been bruised by a shift in macro sentiment, stretched long USD/EM unwinds, a series of risk-on global central bank actions, COVID-19 vaccine headlines and economic reopenings. Daily chart technicals show the dollar selloff is or is close to oversold," BofA notes.
"We looked for support levels to start holding in June, such as a trend line at 1200 on the BBDXY, to still infer a medium term bullish bias. Thus far this is working and we favor tactical USD longs," BofA adds.

Credit Agricole CIB Research discusses GBP outlook this week, and maintains a bearish bias expressing that via holding a short GBP/USD from 1.27 targeting a move towards 1.20.

Societie Generale Research likes short USD/CHF and long AUD/CAD as tactical trades in the near-term.

"Jay Powell's tone last week was too ‘morose' for NEC Director Larry Kudlow, but it's OK because the Fed has returned with sweet treats (and the President's planning another fiscal push and the BOJ is increasing lending support). So, risk is back ‘on' and yesterday morning's FX losers are today's winner," SocGen notes.

"EUR/USD held above 1.12 and is consolidating, but prefer short USD/CHF here, as a better risk-reward trade than chasing the euro...And we still like AUD/CAD, helped by probably will all year. Sub-$40p/b oil doesn't work for Canada," SocGen adds.

Bank of America Global Research discusses its expectations for the BoE policy meeting on Thursday.
"At 18 June policy meeting we expect BoE to agree £100bn more QE, purchased at a slower pace than currently. We expect a bigger package in August. Bank Rate cut to 0%, more generous TFS and possibly weak form of yield curve control," BofA notes.
"In the coming weeks, we expect Brexit and the broader risk backdrop to dominate GBP price action. June is shaping up as the pivotal month in the Brexit negotiations as political impetus is given. Our views on extension are well known and we believe that uncertainty will intensify into 3Q as both sides continue negotiations. Our preferred bias remains for a weaker GBP particularly against low beta currencies such as EUR, CHF and JPY (in order of preference)," BofA adds.

SEB Research discusses EUR/CHF outlook and targets the cross around 1.09 this year and around 1.15 over the coming year.

TD Research discusses the recent market conditions and maintains a selective tactical USD bullish bias. TD holds a short NZD/USD position in its model portfolio targeting a move towards 0.61.

ANZ Research discusses AUD and NZD outlook and targets AUD/USD at 0.70, NZD/USD at 0.65, and AUD/NZD at 1.09 through year-end.

EUR/GBP: Continue To Look For The Risk To Turn Higher Again Towards 0.9184 - Credit Suisse

Barclays Research discusses USD/JPY outlook and targets the pair at 105 in Q3,and 104 in Q4.
"While JPY could face downward pressures in the near term amid the positive risk dynamics, especially in cross-JPY, we expect USDJPY to remain under some downward pressures in the second half of this year," Barclays notes.

Bank of America strategist raises the 3rd quarter EURUSD forecast.
Sees EURUSD at 1.08 by the end of third-quarter 2020.
Prior estimate was 1.02

BofA predicts that the EURUSD will and 2020 at 1.05, but rebound in 2021 to 1.1500.
After broader dollar bullishness this year we expect EURUSD to rise next year as part of a recovery that may more convincingly take hold

Barclays Research discusses EUR/CHF outlook and targets the cross through 1.10 in both of Q3 and Q4.
"We forecast a slightly higher range for EURCHF than previously, as the EU’s Virus Recovery Plan marks an important step towards EU fiscal integration and should result in further unwinds of EURCHF shorts. The SNB will likely continue to use FX interventions to limit any outsized moves higher in CHF (towards 1.05) should risk sentiment deteriorate," Barclays adds.

Barclays Research discusses NZD outlook and adopts a bearish bias over the medium term targeting NZD/USD around 0.62 by year-end.

Bank of America Global Research discusses AUD/USD technical outlook and flags a scope for topping pattern in the making.
"In G10, we think AUD/USD remains vulnerable to a deeper correction. Strong resistance around the .70 area has held. An initial decline has occurred that broke below a trend line as the BBDXY bounced. MACD has crossed bearish and RSI is still pointing lower. We favor tactically bearish AUD/USD trades especially in the .6850-.70 area as the 200d at .6666 and/or the 38.2% retracement at .6470 could be seen," BofA notes.
"What we don't have, and wish we did to increase conviction, is a formal top pattern such as a double top. This is why we preferred to sell into .70 area this month and foresee a July correction. Should new YTD highs occur then a surge to the upper green line in the .72s may occur,"BofA adds.

Credit Agricole CIB Research discusses the EUR outlook and flags a scope for further decline in the near-term.
"note that the likes of the EUR and AUD are still looking overvalued with the EUR also looking overbought...Monday while our positioning indicator suggests that the market is quite long the EUR already. This could keep the EUR grounded even if the upcoming Eurozone PMIs as well as the German ifo continue to point to gradual economic recovery ahead," CACIB adds.

TD Research discusses EUR/USD outlook and adopts a buy-on-dip bias.
"The week draws to a close with the BDXY looking set to mark its second weekly gain in a row. Currencies maintain recent ranges, but there are signs the narrative is starting to crack yet again. USD positioning has shifted back to neutral, data surprises sit near cyclical highs, and all the while global COVID cases are on the rise," TD notes.
"While we think these are reasons to expect a bigger setup in the USD as we progress through H2, the chart shows markets have overpriced this theme. Our dashboard tells us markets have also overpriced a few other USD negative themes, which is why we don't want to chase the move now.
A reshift in the narrative back to COVID will also be risk-averse that would benefit the USD. The second chart tells us that EURUSD (and MSCI EZ) trade at premiums to the mobility trends - MSCI EZ sits 5% overvalued. As a result, we look for a washout towards 1.10 to buy the dip," TD adds.

MUFG Research discusses the USD outlook and maintains a bullish bias, expressing that via holding a short GBP/USD targeting a move towards 1.21.

Credit Agricole CIB Research discusses GBP outlook and maintains a bearish bias, expressing that via holding a short GBP/USD targeting a move towards 1.20.

UOB adopts a tactical bearish bias on GBP/USD towards 1.12270.
"As highlighted, GBP “could decline towards 1.2320, possibly as low as 1.2270”. The pace of the subsequent decline was faster than anticipated as GBP dropped to a low of 1.2344 during NY hours last Friday. Downward momentum remains strong and 1.2320 could be within reach soon. A clear break of this level would shift the focus to 1.2270,"UOB notes.
"At this stage, it is left to be seen if GBP can maintain a toe-hold below 1.2270. Overall, GBP is expected to stay under pressure unless it can move above 1.2480 (‘strong resistance’ level was at 1.2550 last Friday)," UOB adds.

Barclays Research discusses GBP outlook and targets GBP/USD around 1.27, and EUR/GBP around 0.91 through year-end.

Danske Research discusses EUR/USD outlook and maintains a constructive bias targeting 1.15 in 3 months.