EUR/CNH: A break os successive supports – ANZ

After spiking to a high of 7.99 in early March, strategists at ANZ Bank expect EUR/CNH to see successive lows in the remainder of the year. 

Key quotes

“The Eurozone has yet to embrace debt mutualisation, which bodes ill for its fiscally weak members. We see big challenges ahead: rising deflationary pressures, persistently high unemployment and medium term fiscal sustainability. These call for a higher risk premium for EUR.”

“We favour turning short in the cross on rallies. Positive forward points work to the favour of sellers, who can lock in 7.95-8.00 in a 3-6M forward transaction.” 

“For buyers, the first support is 7.60, to be followed by 7.55 and 7.41, last seen 2 years ago.”