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25 Mar 2013
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.
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.