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Forex Flash: Energy dependence a reason to be a long term GBP/USD bear – Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale feels that the UK´s energy dependence situation is a good reason for being a long term bear on GBP/USD.

However, Juckes sees more supporting factors on the horizon. Firstly, he notes concern expressed by the fed´s Professor Stein about asset bubbles. Fed hawkes are slowly building influence and a policy rethink may still be months away but will be inevitable in the long run. Secondly, he notes the trend in UK inflation which has been above the MPC´s target since 2009.

He writes, “UK inflation has been above US inflation since October 2008, and that has a bearing on the real exchange rate too. GBP/USD will track EUR/USD, so Euro resilience will support GBP/USD. The pound still looks undervalued on a fundamental basis relative to the Euro. But despite that, short GBP/USD seems a viable long term trade and a better tactical trade than shorting EUR/USD too early. It’s certainly a good way of expressing the shift in relative energy dependence.”

Forex Flash: EU FinMin meet serves as warm up for G20 – BBH

Brown Brothers Harriman analysts feel that the Euro zone Finance Ministers meet Monday in Brussels is a warm up for the G20 later in the week, so there is potential for some tape bombs for most of the week.
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Forex Flash: 10-year US treasuries hold bias for breakout – RBS

According to Technical Markets Strategist Dmytro Bondar at RBS, “The 10-year Treasury market remained in a range between the 250-day MA support and 132-00 resistance, as the 10/3/3/3 slow stochastic formed a positive crossover in the oversold region. The 250-day MA has proved to be a good support, as the price started the make higher highs over the last few sessions.”
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