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Forex Flash: We remain short EUR/USD, 1.26 a realistic target - Westpac

FXstreet.com (Barcelona) - Westpac expects "plenty more downside on EUR/USD in coming days and probably a souring of risk appetite beyond Europe" says Sean Callow, FX strategist at the bank.

Sean notes: "The EU/IMF/ECB ‘troika’ of lenders clearly didn’t have a backup plan if Cyprus failed to approve the bank deposit tax plan. As it turned out, not a single MP voted for it. The lenders insist that no further funds will be lent. The Eurogroup is planning another statement today (Asia time) but chairman Dijsselbloem has already said their position hasn’t changed."

"Multiple newswire sources report that Cypriot authorities and the ECB are working on plans for capital controls to limit cash withdrawals and electronic transfers. It is now suggested that rather than reopening Thursday, banks could be closed through the whole week. We remain short EUR/USD from 1.3021 and now see 1.26 as a realistic target" he adds.

Forex: EUR/JPY demand at 121.60/90 holds; watch all the supply overhead

Having retraced over 50% of its Monday's recovery, the EUR/JPY failed to maintain the upward steeping formation aimed at closing Monday's major gap, and after faced with 124.00, a new wave of selling pressure knocked the rate back down sub 122.00 as headlines crossed the wires that Cyprus had rejected the unpopular bank levy.
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Forex Flash: USD/CAD, look to buy dips to the low 1.02 - TDS

Despite the recovery on the USD/CAD, printing its highest at 1.0280, Shaun Osborne, Chief FX Strategist at TDS, notes "we are a little cautious on topside prospects still."
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