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Forex Flash: EUR/USD attracted to 1.30 like a temporary magnet - Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale comments that uncertainty is the Euro’s arch enemy and the only good news today is a dearth of economic data or auctions to add to the market’s fears.

He writes, “Tomorrow’s 10yr auction in Italy is the next focus. Technically, as discussed yesterday, EUR/USD looks awful having failed to break back above 1.3250 and 1.30 is today’s magnet. It won’t hold for long....”

He continues to remind us that the European news shows that the UK still has some safe haven virtues, with the Pound bouncing on a classic “sell the rumour, buy the news” reaction to the downgrade over the weekend, but ultimately, he feels that it has fallen as much as it can. He finishes by writing, “If EUR/USD breaks 1.30, GBP/USD could well follow it down, and if today’s CBI Distributive trades data are soft, that won’t help. The most fashionable UK assets today are likely to be index-linked gilts.”

Forex Flash: Political uncertainty in Italy prompts yen short squeeze - BTMU

Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the Yen strengthened sharply yesterday with USD/JPY falling from an intra-day high of 94.77 to an intra-day low of 90.87 as heightened political uncertainty in Italy following the inconclusive election results has triggered a short squeeze.
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Forex: GBP/USD pares gains to return to 1.5162/64

The GBP/USD has moved unevenly Tuesday, however the pound has failed to recapture the allure of its safe-haven status and this is reflective in the sporadic fluctuations and declines seen recently. Recent movement in the 1.5221 region (daily maximum) was short-lived, as the pair has now pared its gains and fallen back towards opening levels at 1.5162/64 during European trading.
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