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Forex Flash: EUR/USD sell on rallies – Rabobank

FXstreet.com (Barcelona) - As the effects of the Cyprus’s bailout deal are dying off, so is the recent correction higher in the single currency, falling from weekly highs around 1.3050 overnight to current lows in the region of 1.2930/35

Despite the deal between the ‘Troika’ and the Cypriot Government, investors’ confidence remains hurt after bank deposits in the local banking sector are now vulnerable, a feeling that could spread to the rest of the euro periphery.

“There are also questions about the viability of the economy now that the financial sector has been crippled and whether it will need further support in the future”, comments Jane Foley, Strategist at Rabobank. This, plus the uncertainties still surrounding the lack of government in Italy would continue to weight on the euro.

“We continue to favour selling EUR/USD on rallies and look to a move to EUR/USD1.28 on a 3 mth view”, recommends Foley.

American equity markets open higher Monday

The US Stock market experienced edged higher Monday as a resolution in Cyprus helped steady the nerves of investors. Beginning with the indices and composites, the NASDAQ rose +0.32% as it settles in region of 3255.32, up +10.26 points in these moments. In addition, the S&P 500 is trading in positive territory, operating at 1562.85, ascending +6.02 points or +0.39% at the time of writing. Finally, the Dow Jones has edged higher at the opening, trading in the zone of 14531.62, presently +0.13% after a movement of +19.59 points.
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Forex Flash: Expect further USD strength in Q2 – JP Morgan

Broad and significant USD strength was seen in Q1 and JP Morgan analysts expect this trade-weighted trend to persist in early spring but not for all of Q2. “Targets continue to reflect country-specific factors which have been dominating currency markets this year, rather than a top-down view on the dollar”, they wrote, pointing to the EUR/USD at 1.32, USD/JPY at 97, GBP/USD at 1.47, AUD/USD at 1.05, USD/CAD at 1.01, USD/MXN at 12.30, USD/BRL at 1.90, USD/KRW at 1060, USD/INR at 55.5 and USD/ZAR at 8.90 in Q2.
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