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Forex: GBP/USD, sellers salivating after 2010/2013 range breakout

Following Friday's news that Moody's had downgraded the UK rating to Aa1 from AAA late Ny session last Friday, the GBP/USD is facing severe selling pressure at the Asian open, down at 1.5073 from 1.5160 last close. It is worth noting the clean breakout of a weekly range held since 2010, suggesting that further downside is on the cards.

Chris Capre, founder at 2nd Skies Forex, made the following comments on his weekly opening remarks: "Posting what is now the 30th daily close below the 20ema on the daily chart, the GBPUSD has been getting monkey hammered to say the least. Although the pair is definitely going parabolic, I expect the selling to continue medium term with the UK just losing its AAA credit rating. I'll sell any pullbacks towards 1.5315 and 1.5415 so look to sell on rallies until we get clear signs of a bottom and reversal."

According to FXWW founder Sean Lee, "real money players will be very active in the GBP to readjust their portfolios, with talk of some barrier protection ahead of 1.5050 and 1.5000 which might halt the slide but it’s probably only delaying the inevitable."

Forex Flash: Fuel for a run of stops on EUR/USD, GBP/USD long - Societe Generale

As Sebastien Galy, currency strategist at Societe Generale, notes on his weekly opening remarks, "the combination of a UK downgrade and a uncertain Italian elections are the fuel for a run of stop losses on long GBPUSD and EURUSD at the opening of the markets in Asia." The fall in GBP, is leading, according to Sebastien, "to a rush for gamma as presumably barriers are taken out" he says. He points out at how GBPUSD had a clean break out of its 2-year range.
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Forex Flash: Italian elections a potential risk event for the euro - NAB

On the ongoing Italian elections, according to NAB, "anything other than a clear win for Bersani’s Democratic Party in the lower house and a seemingly workable Bersani/Monti coalition in the Senate (the Senate has equal say on policy matters) will almost inevitably see pressure resurface on euro peripheral debt markets and with that risk that EUR/USD heads further south to as far as 1.30" the bank said.
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