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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

He feels that if 91.39 is perforated, a subsequent drift towards 90.00 and then the 55-day MA (89.48) we think cannot be discounted. Shifting focus to AUD/USD he comments that his view for the pair remains unchanged and with positive risk appetite subsiding, it may also remain on fragile ground in the current environment. He writes, “With little inclination in the past few sessions to re-challenge the 1.0300 level, we stay on a sell-rally posture for the pair for now with the 1.0200 support perceived to be at risk before 1.0150.”

Italian quagmire reveals avid aversion to austerity

The European Central Bank's fail-safe mechanism for the euro's wounded government debt markets has thus far allayed concerns of another fresh round of sweeping creditor strikes. Indeed, ECB chief Mario Draghi's vow from last July to do "whatever it takes" to protect the euro has continually lent confidence to many asset managers that the zone will not be pushed to the edge of oblivion. As such, while stocks and bonds in Italy and across the Eurozone plunged Tuesday, they still remained some distance from crisis peaks.
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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.
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