What is the outlook for EUR/JPY?
Here is their view, courtesy of eFXdata:
Societe Generale Research flags a scope for a topping pattern in EUR/JPY.
“EUR/JPY has been supported as higher US yields drag the yen down against almost everything. It seems pointless to fight this trend, or this correlation, and our main strategy is just to take advantage of the relative cheapness of USD/JPY puts to hedge against an earlier than expected peak in US yields,” SocGen notes.
“However, EUR/JPY is 5% higher than the last time the Bund/JGB spread was here, and the trend in relative growth expectations makes the yen look very cheap relative to the euro,” SocGen adds.
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