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Forex: EUR/USD jumps off to 1.3100 and higher

The EUR/USD is extending its bounce after going to as low as 1.3018 in early European trade. Having fully retraced daily losses, the pair is now moving higher and quoting above the 1.3100 mark as investors correct yesterday's selloff and price in expectations ahead of Fed Bernanke's speech due at 15:00 GMT.

Italian regulators are in talks with the stock exchange and thinking of banning short selling temporarily to keep markets from high volatility during these uncertain times post-elections. Such decision could drive the EUR/USD lower.

"I think today the pair may start reversing and break the previous descending wave; the first target is at 1.3190. Later, in my opinion, the price may start a new correction", wrote Roboforex.com analyst Igor Sayadov, pointing to two possible future scenarios: the pair either continues growing up, or starts forming a new consolidation channel to break its minimums.

Forex Flash: What lies ahead of EUR/USD? – BTMU, UBS and Commerzbank

The single currency is navigating below the key resistance at 1.3100 on Tuesday, as news coming from the Italian election is the main driver of the markets absent docket in the euro area...
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Forex Flash: GBP gets pounded as asset managers sell – UBS

The downgrade of the UK last week has already triggered a response in GBP. On Monday the currency underperformed nearly all G10 currencies – even against the EUR and JPY, both of which had some unfavorable event risk to reckon with. According to Research Analyst Gareth Berry at UBS, “Even though structural deficiencies had already been expected for the UK economy and the pound for some time, the selling triggered on Friday points to some active divestment flow. Our FX Flow Monitor did show heavy GBP/USD selling by asset managers last week (third largest on record by this community), but the bulk of selling still took place on Friday.”
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