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Forex Flash: Sharp Yen correction opportunity to buy on dips - Societe Generale

According to Sebastien Galy, currency strategist at Societe Generale, "rising FX volatility has not yet mutated into a full blown correction, though the correction is deep." The analyst still sees USD/JPY a buy on dips around the 90 handle and EUR/USD should hold above 1.30.

Mr. Galy adds: "Nonetheless, gyrations in FX and now in equities are increasingly severe. Such tendency for sharp corrections seen as opportunities to buy on dips are similar to the market behavior in 2007 as we advanced every deeper into the subprime crisis. The next key test will be the sequester decision in the US which does not seem to be going in an encouraging correction."

"Disorderly moves in the JPY or CHF are likely to bring in a rapid response from the local authorities to break any thought of using their currencies as safe havens. Add to this bernanke’s speech to lawmakers on Tuesday will likely prove dovish and we may have the right elements for this correction to not mutate into something worse" the analyst comments.

Session Recap: Risk Aversion takes the market; Yen higher, Euro lower

Market has experienced an up-and-down session with early rallies but later declines. Yen rose to 1-month highs against its major competitors and the Euro tumbled hard against the GBP, the mentioned Japanese Yen and the USD dollar. Stocks post big loses too.
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Forex: EUR/GBP knocks on 0.88 dumping to 0.86 right after

Big moves this Monday in markets, and EUR/GBP was not an exception, climbing first to a fresh 15-month high at 0.8815 in very early NY trade, to start dumping soon after when first results for Italian election started to come out, showing signs of uncertainty. Mostly all markets printed highs around 15:00 GMT, and then started to selling off, every kind of risky asset.
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