OctaFX | OctaFX Forex Broker
Open trading account

Forex: Epic falls in all Yen crosses; Hedge funds unwind massive longs

The ongoing epic fall in all Japanese Yen may be explained as a result of alarm, confusion, consternation, fear, hysteria, even terror to no longer hold long Yen positions, with prime brokers, according to Sean Lee, founder at FXWW, "reporting panic selling by hedge funds and CTAs who had built up massive long positions" he says.

However, there is no better way to describe the suffering of those long-held Yen longs than taking a look at EUR/JPY for example, which has been hammered over 6 big figures! from 125.00 to 119.00, with the trigger reported as far as headlines go being that the market is hating the huge uncertainty surrounding the governability of Italy, as a second election braces.

What to do with Yen crosses? Better let the dust settle first, say Adam Button, editor at Forexlive: "If you want to buy yen crosses, wait for the bleeding to stop and look for a sideways move. With the euro, it’s a bad result but the market can withstand another election in Italy. That said, it will be dicey and the Italian bond market hates Berlusconi."

What is true is that at the end of the day the markets are governed by some sacred rules, one of them being when everyone on TV and the internet continues to provide bearish opinions on the Yen - technicals did not suggest otherwise though - one should be the most alerted that this type of collapses increase in odds, kick-started when masses are all on one side of the ship, and what seems like the trigger, namely the bad election results for pro-austerity parties in Italy, is simply a great excuse.

Forex: EUR/USD falls to 1.3050

The Euro has continued with its declines against the Dollar on the Italian election results and after falling around 265 pips from 1.3315, the EUR/USD has posted 1.3050 as fresh lowest level since January 10th.
Read more Previous

Wall Street tumbles on Italy election fears

The US stocks market has fallen hard on Monday as investors have been concerned on Italian election and a posible hung government. Pier Luigi Bersani leads the run with a close Berlusconi in a second position according to the latest results.
Read more Next
Start livechat