TD Research discusses EUR/USD, and GBP/USD tactical outlook and sees a further scope for the ongoing recovery to run further near-term.
" The Brexit news also offers the European complex room to rally as well, especially as EUR and GBP trade to modest discounts to cyclical drivers. A key level to watch in the former is 1.15 and 1.30 in the latter.
Besides positioning and the midterms, we note the USD is now trading about a touch over 3% rich to our global factor model. We haven't seen both valuation and positioning leaning this much in one direction since late Q2, increasing the focus on the midterms," TD argues.