TD Issue Short Recommendations In GBP/CHF, EUR/NZD & NOK/SEK

TD Securities issued 3 tactical trades on Monday, with an estimated trading horizon of 1 month and trade size of $1mn equivalent in each position.

• Sell GBP/CHF at CHF1.3025 with a target of CHF1.2520 and a stop at CHF1.3330.
• Sell EUR/NZD at NZD1.6715 with a target of NZD1.6100 and a stop at NZD1.7075.
• Sell NOK/SEK at SEK1.0256 with a target of SEK0.9900 and a stop at SEK1.0450.
• They suggest that "growing divergence among European currencies has been a strong theme this year. Some have outperformed on better vaccine performance (GBP) and leverage to relation (NOK). Defensive currencies, like CHF and EUR, have lagged on merged growth and poor fundamentals - at least based on our MRSI tool. While these trends could extend in the near term, we think some of these crosses have reached extremes that warrant fading. Positioning and valuations remain elevated in GBP, increasing vulnerabilities ahead of risk events in Scotland next month. Meanwhile, despite the poor fundamental backdrop, CHF offers a nice discount on our valuation tools, which partly makes up for the weak growth story. GBP remains overpriced against most of the major European currencies on global growth and risk. NOK/SEK could pause here, as MRSI suggests a short-term flip in the Scandi fundamental story. Finally, NZD is the cheapest G10 currency on HFFV, pointing to a near 4% discount."