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Forex Flash: Bernanke testimony likely to mirror previous one – UBS

Elsewhere, Fed Chairman Bernanke mostly brushed aside concerns about the unintended consequences of QE3 implying there is little urgency in cutting the program short before the labor market improves substantially. Bernanke gives testimony again today, but his prepared opening statement is likely to be identical to Tuesday's with only politicians' questions offering scope for significant variation during Q&A.

The move did little yesterday to help the EUR/USD, which fell on Bernanke’s testimony as the tone echoed results that were far different from the previous assertion the week before that QE3 would be on its way out. According to Research Analyst Gareth Berry at UBS, “we are definitely neutral on the EUR/USD heading into Wednesday, citing strong support at 1.2998. A break below here could ultimately trigger a deep sell-off to 1.2877 however.”

Forex Flash: USD/JPY down on recapitulation in global risk appetite - OCBC Bank

Emmanuel Ng of OCBC Bank notes that in the near term, a further recapitulation in global risk appetite levels may tip USD/JPY lower (watch the JPY-crosses) in the near term despite his structural bearish bias for the currency
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Forex Flash: Dollar still supported after Bernanke speech - BTMU

Derek Halpenny of the Bank of Tokyo Mitsubishi UFJ notes that the dollar has been broadly stable versus the Yen and other Asian currencies after the semi-annual testimony from Chairman Bernanke was perceived as balance with him offering a strong defense of QE, but also reassuring the Senate Banking Committee that the Fed is in control and can reverse course at any point.
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