TD Research discusses EUR/USD outlook in light of the latest reading from its high-frequency fair-value models.
"The EUR is no longer just a European risk story so one important consideration is to overlay the global component alongside the local one. For now, the implied level of the global factor sits at 1.1330.
Our HFFV implies a level around 1.1350, suggesting that it is trading with only a modest discount. It also puts a focus on the upcoming G20 Summit, especially since Trump has put auto tariffs on the brunch menu," TD notes.
"A rise in the risk premium towards the 2-sigma level would point to a break below 1.12, though the uncertainty over the G20 probably argues to hold shorts in EURJPY in the very short-run," TD adds.