Morgan Stanley Research discusses GBP and AUD outlook and adopts a bearish bias on the 2 currencies. MS maintains a limit order to long EUR/GBP at 0.8670.
"GBP: Watching Domestic Politics. Bearish. While GBP shorts have increased, overall positioning is still light compared to other G10 currencies, which see a large short base against the USD, suggesting room for GBP shorts to increase further. We like buying EURGBP on dips,"MS notes.
'AUD: Fade the Recent AUD Bounce. Bearish. AUD may find some temporary support as AUDUSD longs are unwound...1Q growth revealed housing sector weakness and falling consumption, and we continue to expect housing sector debt in Australia to be more concerning than consensus projects. We also see the labor market deteriorating, turning the RBA increasingly dovish," MS adds.
*Recorded in eFXplus Orders