Merrill Lynch reveals the 6 forex trading opportunities that are left this year

For this final quarter of the year, Merrill Lynch summarises its favourite forex trading opportunities.

1- The US elections are a key risk and the markets are underestimating them. We like this forex volatility.

2- The USD will go back up as the markets are still incorporating a low probability of a Fed rate hike in December.

3- The EUR could fall if the ECB extends QE, but we think this will be a buying opportunity, particularly against the JPY.

4- We will not try to catch a falling knife, but the GBP is now close to our forecasted low and undervalued compared to data and fundamentals. We may not be far from a buying opportunity.

5- Stay long on Scandinavian currencies, as they have limited downside risks but many upside risks, especially against the CHF, which has limited downside risks.

6- Positioning and evaluation support an increase of the AUD/NZD.