FXStreet (Delhi) – Research Team at BNP Paribas, suggests that they have entered a new short EURUSD trade recommendation in the USD’s post-FOMC pullback, at 1.0980, targeting a move to their end Q1 2016 target of 1.0400. Key Quotes “Equity markets have responded well to the Fed, with the S&P 500 closing almost 1.5% higher. This suggests risk aversion will not support the funding currencies vs the USD. The USD struggled in the immediate aftermath of the Fed news, but we believe the Fed result is likely to be significantly supportive for the dollar in the weeks ahead. This is especially the case given the pullback in the USD in the first half of December and the shakeout in long USD positions. Fed focus on exchange rate risks remains a headwind for USD momentum, with USD bulls likely to remain wary that very rapid USD gains could curtail rate hikes.” “We think this dynamic will ensure that USD gains are gradual. Notably, the gradual USD appreciation we anticipate should lead to a decline in the y/y pace of USD gains as we move through 2016, which should reduce the Fed’s FX concerns somewhat. We also remain short AUDUSD from 0.7335, targeting 0.7000, and this trade should be robust even if risk sentiment were to take a turn for the worse.” For more information, read our latest forex news.