Bank of America Global Research highlights its top 5 FX trades for 2022.
"Long USDJPY. We target 117, with current spot at 112.9, and stop loss at 110.8.
Long USDCHF. Buy a 3m 0.94/0.97 USDCHF call spread. Fundamentals and Technicals supportive. USDCHF has formed diamond bottom and is due to upside break.
Short EURUSD. Buy a 6m ATMF-1.09 EURUSD put spread. We see elevated FX vol as global inflation spikes higher and we position for monetary ECB-Fed policy divergence," BofA notes.
"Long NOKSEK. Buy NOKSEK at 1.0050, target 1.07, stop/loss 0.9750. We are bullish oil prices and we think relative monetary policy is underpriced.
Long EURCAD vol. We see higher FX vol. 3m EURCAD vol has been performing and elevated oil prices and monetary policy divergence should keep it sustained," BofA adds.