Institutional trade recommendations

Credit Suisse discusses EUR/USD technical outlook and maintains a bullish bias over the coming weeks.
"EURUSD has been well supported in the choppy range of the past few weeks and with a bullish “outside day” in place from last week and with our bias for the EUR itself to strength and indeed for the USD to weaken as well, our bias stays higher for an eventual upside resolution to this range.
Immediate resistance is seen at 1.1327. Above here and then the 38.2% retracement of the entire 2018/2020 fall and price resistance at 1.1349/69 on a closing bass should confirm an important break higher for strength back to the 1.1423 June high, then more important at the 1.1495 high for the year," CS notes.
"Near-term support moves to 1.1235, then 1.1219, with 1.1191/85 needing to hold to keep the immediate risk higher. Below would warn of a fresh look at 1.1168/57 – the recent low and 38.2% retracement of the rally from late April," CS adds.

MUFG Research flags a scope for a higher AUD in light of this week's RBA July policy meeting.
"It was also notable that the RBA did not mention the Australian dollar in contrast to the RBNZ’s latest policy update. It suggests that the RBA is less concerned by the stronger Australian dollar. In recent comments RBA Governor Lowe noted that it is hard to argue that the Australian dollar is overvalued," MUFG notes.
"It leaves room for the Australian to strengthen further in the near-term. The next key resistance levels are at 0.7000 and then the 10th June high at 0.7063," MUFG adds.

Credit Agricole CIB Research advises against chasing AUD higher from current levels.
"RBA Governor Lowe failed to express concerns as when it comes to the risk of stronger currency’s dampening impact. However, with him having explained not long back that it is difficult to argue that the currency is overvalued, his rhetoric may not really come as surprise," CACIB notes.
"While stable rate outlook should keep the AUD predominantly driven by external factors such as global risk sentiment, which stays fairly well supported, higher uncertainty on the virus front speak against chasing the AUD higher from here,"CACIB adds.

NAB Research discusses AUD/NZD outlook and maintains its targets at 1.09 in Q3 and 1.10 in Q4.
"Our AUD/NZD view has been one of near-term consolidation, following the plunge from parity, ahead of the next run higher, to at 1.10 by year-end," NAB notes.

Credit Suisse discusses GBP/USD technical outlook and flags a scope for fresh sellers near the 1.2688/96 zone.
"GBPUSD has extended its defence of key retracement support at 1.2278 – 38.2% of the entire rally from the March low – and above price and “neckline” resistance at 1.2524/49 has seen the flagged in-range base complete.
With MACD momentum also turning higher again we look for this to clear the way for further towards the important 200-day average and mid-June high at 1.2688/96. Whilst we would expect fresh sellers to show here, should strength directly extend this can expose the downtrend from late last year, currently seen at 1.2752, with the “measured base objective” seen at 1.2808, just ahead of the key June high and 78.6% retracement of the 2020 fall at 1.2813/17," CS notes.
"Support moves to 1.2550/49 initially, then 1.2530/20, which we look to now try and hold to keep the immediate risk higher. Below can see a deeper setback to 1.2493, with 1.2438 needing to hold to see the base maintained," CS adds.

Credit Agricole CIB Research adopts a sell-on-rallies bias on GBP in the near-term.
"At present, the GBP is benefiting from the recovery in risk sentiment, which in turn is fuelled by hopes for a Covid-19 vaccine and better-than-expected economic data. These more than offset the continuing increase in the global number of coronavirus cases and seem to dampen concerns about a second wave of infections. On the domestic front, the GBP is supported by hopes for an aggressive fiscal stimulus to help foster the post-Covid recovery," CACIB notes.
"All that said, the GBP remains a sell-on-rallies currency in our view. Indeed, we doubt that the latest rebound in risk would translate into a sustained rally. This could leave the GBP vulnerable to renewed correction lower vs the USD and the EUR," CACIB adds.

MUFG Research discusses EUR/USD outlook and flags a scope for further gains towards 1.1495, with a break above a likely trigger for a broad USD sell-off.
"The improving outlook for growth outside of the US has helped to support risk assets and weighed on the US dollar more broadly. After failing to break back below the 1.1200-level in recent weeks, EUR/USD has rebounded and reached its highest level overnight since 11th June," MUFG notes.
"The pair could now test the top of its current trading range between 1.1200 and 1.1400. A break above the high from 10th June at 1.1422 and then 9 th March high at 1.1495 would open the door for a more significant US dollar sell off," MUFG adds.

Danske Research discusses its expectations for ECB July policy meeting.
"For spot FX, the direction and stance of the ECB and euro area fiscal politics are, in our view, quite well priced and communicated (though to a lesser extent when it comes to the outcome for Brexit). In turn, it will be the extent and speed of the global recovery that sets the tone in EUR/USD. We remain constructive and expect broad USD to decline over the coming months and our 3M forecast is 1.15," Danske adds.

Credit Suisse discusses EUR/USD technical outlook and shifts into a neutral bias in the near-term.
"The 38.2% of the entire 2018/2020 bear trend has again capped to maintain the sideways range. The subsequent aggressive rejection and retreat reinforces the broader sideways ranging of the past month. Below support at 1.1258/54 would see an in-range top complete to keep the immediate risk lower in the range with support seen next at 1.1219, then back at the range lows and 38.2% retracement of the rally from late April, starting at 1.1185 and stretching down to 1.1157. Whilst we would look for a fresh attempt to hold here, a break can see weakness extend to test the 38.2% retracement of the entire rally from March at 1.1122, but with better buyers expected to show here," CS notes.
"Resistance is seen at 1.1349/71. Beyond here remains needed to resolve the range higher, with resistance then seen next and initially at 1.1399," CS adds.

Societie Generale Research discusses the current market conditions and flags some of its current favorite trades.

"If you think the Nasdaq's current valuation is bonkers, you have to accept that the dollar's journey to a lower level won't be without some pretty big bumps along the way...A clear dollar downtrend will also require a change in the global equity market pecking order," SocGen notes.

"Just as calling in the IMF in 1976 or making the Bank of England independent made sterling safe(r) and allowed it to recover, so too, agreement on the European Recovery Fund would go a long way to making the euro safer. But until there are clear home-grown reasons to own European assets, a major market correction would still be dollar-supportive...In the meantime, short GBP/SEK, long AUD/CAD, short USD/CHF and short USD/JPY are our favoured trades," SocGen adds.

Credit Agricole CIB Research adopts a neutral bias on EUR/CHF in the near-term, while staying long the cross as a structural trade targeting a move towards 1.15.

Credit Suisse discusses EUR/CHF outlook and maintains a bullish bias, expressing that via holding a long position targeting a move towards 1.10, with a stop at 1.0490.

Credit Agricole CIB Research sees GBP close to an attractive selling zone around current levels.
"In the UK, there should be bigger focus on labour market and inflation data, to be released later this week, we expect incoming data to continue highlighting the challenges ahead for the Johnson government and the BoE," CACIB notes.
"As such, we stay cautious on GBP and believe the currency is once again trading close to attractive selling territory," CACIB adds.

MUFG Research discusses GBP outlook and maintains a bearish bias through Q3 targeting a move towards 1.21.
"From an FX perspective it is always about the relative and we would argue that the relative macro position for the UK is looking grimmer than most other major economies that will lead to further GBP weakness ahead...Our end-Q3 GBP/USD forecast is 1.2100," MUFG notes.

Credit Suisse discusses CAD outlook and adopts a a neutral bias vs USD and a bearish bias vs AUD, NZD, and EUR
"Market-based monetary policy expectations for the BoC are the most hawkish in G10. Markets expect the BoC to run a consistently tighter policy vs the Fed through 2021. While we suspect that some of this pricing reflects perception of a very loose fiscal policy, we think this creates an asymmetry whereby CAD is more vulnerable to poor data surprises than other cyclical FX," CS notes.
"We look for USDCAD to trade in a range between 1.3400 and 1.3750, and look for CAD to underperform vs AUD, NZD and EUR," CS adds.

Societie Generale Research discusses its latest views on G10FX. SocGen likes to be long AUD, SEK, CHF, JPY and short CAD, GBP, USD.

Societe Generale Research maintains its bearish bias on GBP/JPY and USD/CHF over the coming weeks.

Credit Suisse Research discusses its expectations for the EU Summit on Friday.
"We've pointed out that our EURUSD 1.15 target is only an initial one, and that we can foresee gains in the pair to 1.20 and above in many scenarios that could unfold over the remainder of 2020," CS adds.

Citi maintains a structural bullish bias on AUD against both the USD and NZD.

Credit Suisse discusses EUR/USD technical outlook and maintains a bullish bias in the near-term.
"Near-term, our overall bias remains higher and we look for a challenge in due course on pivotal resistance from the high for the year at 1.1495. Whilst we expect this latter level to remain a formidable barrier, a break higher at any stage would be seen completing a significant medium -term base to mark a more sustained trend higher with resistance next at 1.1571, then the 50% retracement of the fall from 2018 at 1.1596, which we would look to cap at first,' CS notes.
"Big picture though, we suspect we could eventually see the market test its early 2018 point -of -breakdown at 1.2155.," CS adds.