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18 Mar 2013
Forex Flash: Cyprus reaction over exaggerated - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts believe that the immediate reaction to the developments in Cyprus during Asia trading time was exaggerated and the market spent the Tokyo afternoon and the European morning retracing the initial moves.
They note that the euro held key support near $1.2880 and recouped a cent by the middle of the European morning. They see that the key level to watch is $1.30, Friday's low, which is where the opening gap extends. They write. “The dollar fell to just below JPY93.50 in the knee-jerk response, but has climbed steadily back to fill the opening gap in early Europe. Sterling has fared well, giving rise to some talking about its re-found safe haven status. Sterling briefly traded below Friday's lows, but half above $1.5060 and recovered a cent to trade near the pre-weekend high (~$1.5175). The dollar bloc was sold off, with the Australian dollar hit the hardest initially, but they have all stabilized around a third of a cent lower. That is generally the pattern with the other major and emerging market currencies. “
They note that the euro held key support near $1.2880 and recouped a cent by the middle of the European morning. They see that the key level to watch is $1.30, Friday's low, which is where the opening gap extends. They write. “The dollar fell to just below JPY93.50 in the knee-jerk response, but has climbed steadily back to fill the opening gap in early Europe. Sterling has fared well, giving rise to some talking about its re-found safe haven status. Sterling briefly traded below Friday's lows, but half above $1.5060 and recovered a cent to trade near the pre-weekend high (~$1.5175). The dollar bloc was sold off, with the Australian dollar hit the hardest initially, but they have all stabilized around a third of a cent lower. That is generally the pattern with the other major and emerging market currencies. “