EUR: A Start Of 2-Weeks Window Of EUR Rally; What's The Trade? - ING

ING FX Strategy Research argues that the window of opportunity for an ECB-led rally may now be open following the move by Catalan leader Puigdemont to ‘suspend’ the Catalan referendum result.

"We have seen a trivial relief rally in the EUR and think that this may just be the start of a two-week window of EUR strength ahead of the big Oct ECB meeting.

While political uncertainty hasn’t fully faded, we see the focus for the currency turning back to the positive cyclical EZ economic story and prospects of a more hawkish ECB QE taper announcement later this month. Certainly our house view for a drop to €20-25bn monthly QE purchases from Jan-18 (albeit for slightly longer) could see a one-off move higher in EUR pairs," ING argues. 

Position-wise, ING likes long EUR/USD targeting 1.20, EUR/JPY targeting 135, and long EUR/CHF  targeting 1.17.

Source: ING Global Markets Research