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Week in FX Europe Feb 5-10

Despite the EUR’s sell off in the final trading session of the week, the single currency has managed to regain some lost ground against most of the G10 and EM currencies. Analysts agree that the “policy process and the firewall thats been built around Greece” have been contributing to the “excessive degree of benefit of doubt” which in turn has helped promote this move.

However, other factors in the background have also been aiding this trade. The dovish Fed message is leaving the dollar vulnerable. Certainly the one directional lemming trade, being short the EUR, is leaving the right hand side rather ‘naked.’ These weaker shorts have allowed the market to gravitate towards the short term EUR top.

What will be the next pressure point for the EUR? As we continue through the PSI process and into the next three-year LTRO program we will probably get to see the EUR trade again on the back foot.

Below are some other highlights of the week:


EUROPE

 

AMERICAS Week in FX

ASIA Week in FX [1]

 

WEEK AHEAD

  • JPY delivers prelim GDP and a rate announcement
  • GBP, USD and CAD present CPI and BoE its inflation report
  • Retail Sales come to us from NZD, USD and GBP
  • Claimant counts are announced in GBP, AUD and USD
  • Germany delivers the ZEW Economic sentiment
  • FOMC releases its minutes
  • USD has Philly Fed Manufacturing and PPI to deal with

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [6]

Vice-President of Market Analysis at MarketPulse [7]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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