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EUR/USD edges higher as US data disappoints

 

 

FXstreet.com (Córdoba) - EUR/USD bounced from session lows and spiked to the 1.2980 area after data showed US GDP was revised slightly lower to 2.4% from 2.5% in Q1, while jobless claims unexpectedly rose to 354K last week.

 

Soft growth and employment data undermined expectations that the Fed could begin to taper its bond buying program and weighed on the greenback, which was staging a mild comeback ahead of the data.

 

EUR/USD rose nearly 30 pips within the last minutes, but has been capped by 1.2980 so far. At time of writing, EUR/USD is trading at the 1.2970 zone, where it is still up 0.2% on the day.

 

On the upside, immediate resistances are seen at 1.3000 (psychological level) and 1.3020 (200-day SMA), while supports are seen at 1.2930/20 (daily lows/100-hour SMA) and 1.2880 (May 28 low).

 

 

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May 30, 2013

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EU to lower the tax on financial transactions

 

 

FXstreet.com (Barcelona) - According to Reuters, the EU is considering considerably scaling back the financial transactions tax, in the light of the banking sector's and the UK's firm opposition towards the measure.

 

European officials plan to impose a small levy of 0.01% (compared with the previous proposition of 0.1%) initially only on share transactions. After assessing the first impact of the FTT it will be decided whether other types of products should be taxed as well.

 

Under the current proposition, the EU would raise only up to 3.5 billion euros a year, instead of 35 billion euros, as initially planned.

 

 

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May 30, 2013

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EUR/JPY testing higher

 

 

FXstreet.com (London) - The EUR/JPY has rocketed from 130.20 to test 132.00 throughout the European day.

 

The EUR/USD has drifted higher nicely while the Yen has also gained some 180 pips on the day, moving well away from the 100.00 mark which was anticipated from overnight moves lower. EUR/JPY is still some way off from the top side of the previous ascending trend line and downside risk applies with closes below 131.60 and 132.50 resistance lines set up last week as a double top before the break of the supporting line.

 

The majority of the market is not expecting the ECB to follow through with the mentions of negative interest rates, for now. Meanwhile, Japanese officials speaking of late have had little calming effect on JGB or equity markets.

 

 

 

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May 30, 2013

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Flash: EUR/USD holds bearish bias – BTMU

 

 

FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts expect EUR/USD to hold a bearish bias ahead and range between 1.2850 and 1.3200.

 

They begin by noting that they expect the euro to weaken modestly in the week ahead with EUR/USD increasingly struggling to trade above the 1.30-level. They see that the euro is being undermined against the US dollar by rising real yields in the US supported by heightened investor expectations that the Fed may taper QE in the coming months. Further, the release of the non-farm payrolls report for May will prove crucial for near-term dollar direction.

 

They add that unless the report reveals that employment growth has weakened materially, the US dollar should continue to trade on a firmer footing. US dollar direction will also be impacted by the release of the latest PCE deflator report for May. Overall, they feel that a weaker US dollar could result if disinflationary pressures exceed expectations pushing back Fed QE tapering expectations.

 

They finish by commenting that, "The main event for euro direction will be the upcoming ECB meeting. We expect the ECB to leave monetary policy unchanged although it remains a close call. With President Draghi likely to maintain an easing bias, an unchanged policy stance will likely still weigh modestly upon the euro. Any signal that the ECB is moving closer to implementing negative deposit rates would weigh more heavily."

 

 

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May 31, 2013

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EUR/USD keeps 1.3000 after US PCE

 

 

FXstreet.com (Barcelona) - The euro remained apathetic after the US inflation figures, in terms of the PCE, came in below market forecasts during April.

 

In fact, the Core Personal Consumption Expenditures posted an annualized increment of 1.1%, a tad higher than the median, while the rest of the readings came in below forecasts. The headline advanced 0.7% on a yearly basis and contracted 0.3% inter-month. Further data showed that Personal Income came in flat while Personal Spending contracted 0.3% during the same period.

 

The pair is now losing 0.37% at 1.3001 and a violation of 1.2965 (MA21d) would target 1.2934 (low May 30) en route to 1.2931 (MA10d). On the other hand, resistance levels line up at 1.3062 (high May 30) ahead of 1.3072 (61.8% of 1.3243-1.2796) and then 1.3114 (MA100d).

 

 

 

 

 

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May 31, 2013

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Flash: USD/CHF could extend correction with push below 0.9527 – UBS

 

 

FXstreet.com (Barcelona) - UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's majors and outline the technical positions.

 

Beginning with the USD/JPY, the potential is for extension of the correction phase. The next important support is at 99.58 ahead of 97.02. Resistance is at 101.80 ahead of 103.74, suggesting a neutral outlook.

 

As for the GBP/USD, “There is a major resistance at 1.5308. As long as this holds, the pair is vulnerable as bearish conditions prevail and a break below 1.5111 would expose 1.5009, suggesting a bearish near-term outlook.” Finally, regarding the USD/CHF, with bull trend in place, the recent downside move should be limited in time and extent, which has tested support at 0.9527. A closing break below would prolong the correction to 0.9431. Resistance is at 0.9651 ahead of 0.9791.

 

 

 

 

 

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Jun 3, 2013

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AUD/USD soars, reaches pass 0.9760

 

 

FXstreet.com (Buenos Aires) – Aussie extended its advance to a fresh 2-week high above 0.9760, having been positive since early weekly opening, favored by positive Chinese data released past Saturday. Having been grinding higher for most of the European session, US disappointing data and the promise of a lively future for QE, gave the pair a reason to recover ground, after being steadily bearish for over the past 3 weeks.

 

 

While short term technical readings suggest now an upward continuation, the pair has not yet filled the weekly opening gap around 0.9570. Immediate resistance comes at 0.9777, May 23rd daily high, followed by 0.9820 price zone, 20 DMA. Supports are at 0.9710, May 17th daily low, followed by strong static 0.9660 level.

 

 

 

 

 

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Jun 3, 2013

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EUR/CHF muted at 1.2400

 

 

FXstreet.com (London) - Surprisingly, the EUR/CHF has remained onto the 1.2400 handle since the release of EMU Producer Price Index (YoY) that arrived in at -0.2% in April, vs. expectations of +0.3%.

 

Analysts teams at ANZ said that the “…bias since late-2012 has been for an eventual break through 1.2650 (38.2% of the fall from 2007’s 1.6830 high) for a range flip towards the next retracement and so a target zone of 1.3260-1.3450. However, failure to breach 1.2650 and sliding back into the 1.2350-1.2450 area is unwinding upside potential. A sharp move above 1.2550 is needed to avoid a return to dull range trading”.

 

Support is seen at 1.2380 ahead of 1.2350 with the ECB on Thursday as the main event in focus for the pair this week. USD/CHF continues to be offered weighing on the cross. In the opinion of Commerzbank, the USD/CHF’s correction lower has extended lower towards the 200 day ma at 0.9358, the intraday charts have turned more negative and at this stage they are unable to rule out further weakness to the 0.9324 2013 uptrend, which they look to ideally hold.

 

 

 

 

 

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Jun 4, 2013

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Flash: UK Construction PMI offered upside surprise – Brown Brothers Harriam

 

 

FXstreet.com (London) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that the UK construction PMI offered an upside surprise, following yesterday's better than expected manufacturing PMI.

 

“We are struck by the rebound that has been recorded since the 46.8 reading in February (to 50.8 in May). On top of that the BRC sales figures (1.8% in May vs. consensus of 1.3%) suggest that perhaps the CBI distributive trades survey was too pessimistic. Sterling is trading with a heavier bias, straddling the $1.53 level through the London morning”.

 

He went onto say that the 5-day moving average is crossing above the 20-day average for the first time since mid-May, a constructive technical development and provided the $.5240 area holds, sterling can retest the $1.5400 area.

 

 

 

 

 

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Jun 4, 2013

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NZD/USD dips further, around 0.7945/50

 

 

FXstreet.com (Barcelona) - The kiwi dollar is giving back its weekly gains so far, now hovering over the mid 079s after hitting highs above 0.8060 overnight.

 

According to I.Spivak, Currency Strategist at DailyFX, “Prices put in a Bullish Engulfing candlestick patter above major support at a rising trend line set from June 2009, hinting a move higher is ahead. Initial resistance is at 0.8112, the 23.6% Fibonacci retracement. A break above that targets the 38.2% level at 0.8219. Trend line support is now at 0.7893”.

 

The NZD/USD is now retreating 0.90% at 0.7946 facing the immediate support at 0.7937 (low May 31) ahead of 0.7922 (61.8% of 0.7456-0.8670) and finally 0.7915 (low Sep.5 2012). On the flip side, a surpass of 0.8061 (high Jun.5) would open the door to 0.8072 (MA10d) en route to 0.8111 (23.6% of 0.8676-0.7937).

 

 

 

 

 

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Jun 5, 2013

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USD/CHF hits 1-month low

 

 

FXstreet.com (Córdoba) - The US dollar fell to a fresh 1-month low versus the Swiss franc following mixed economic data for the US.

 

USD/CHF initially found support at the 0.9420 area but recently broke below that level and stretched to its lowest since May 9 at 0.9410. However, the pair has managed to bounce from lows and it is currently trading around 0.9435, still down 0.3% on the day.

 

In terms of technical levels, immediate supports could be faced at 0.9410 (daily low) and 0.9390 (100-day SMA), while resistances are now seen at 0.9490/95 (daily highs) and 0.9520 (100-hour SMA).

 

 

 

 

 

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Jun 5, 2013

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EUR/GBP falls back below 0.8500

 

 

FXstreet.com (San Francisco) - After bouncing at 0.8495, the EUR/GBP's recovery was capped at 0.8525 with the pair trading back to previous lows. Currently the pair is trading at 0.8500.

 

The EUR/GBP is 0.48% negative on the day right now. Short term perspective is strongly bearish according to the FXstreet.com trend index in the 15-minute chart. Indicators such as MACD, CCI and Momentum are pointing to the south while the Stochastic is bullish.

 

As for technical levels, immediate resistances are seen at 0.8525 (intraday level) and 0.8545 (daily high), while supports could be found at 0.8495 (daily low) and 0.8475 (May 14 low).

 

 

 

 

 

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Jun 5, 2013

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USD/CAD recovers the level of 1.0324/30

 

 

FXstreet.com (Barcelona) - The USD/CAD exchange rate recovered the mark of 1.0324/30 after the release of US data Thursday.

 

In the United States, Initial Jobless Claims (June 1) came in at 346K, against expectations of 345K. In addition, Continuing Jobless Claims (May 25) yielded a figure of 2.952M, relative to estimates calling for 2.975M.

 

After the recent recovery, the USD/CAD is still trading negatively at -0.15%. According to Gareth Berry, a Research Analyst at UBS, “Resistance for the USD/CAD pair is at 1.0388, a break above which would open the way to 1.0451 and then 1.0524 – support is at 1.0328 ahead of 1.0262, indicating a bullish intraday bias.”

 

Based on the charts, the USD/CAD’s slide below short-term support just under 1.0300 at the start of the week has yielded naught, so far. Instead, the quick snap higher again through mid-week makes the downside move look like a false break and the bigger picture look still relatively constructive. We think 1.0295/1.03 is firm short-term support now. Short-term price signals suggest the intraday low may be in already. We look for gains to 1.0375/85.” recommends the TD Securities Team.

 

 

 

 

 

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Jun 6, 2013

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Flash: Poor Trade data keeps pressure on AUD - Societe Generale

 

 

FXstreet.com (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that Thursday started with poor trade data in Australia that have simply continued the AUD's downward trend.

 

The RBA policy statement was a green light for AUD bears and they are using it to keep right on going. He writes, “The move has only just begun and remains the best way of positioning for softer Chinese growth, continued re-balancing in the Chinese economy and for the risk of capital flows and yuan depreciation if the Fed does start tapering and drives US yields much higher by year end (see this morning's economics piece).”

 

 

 

 

 

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Jun 6, 2013

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Commodities Brief: NFP’s see dollar strength and metals offered

 

 

FXstreet.com (London) - The commodities, specifically precious metals, are offered and reacting to the dollar

 

Brent Crude

 

The Brent has been bid since the decline of the dollar and indeed was stabilised ahead of what printed as a relatively benign NFP’s differential between expectations and actual readings. The commodity traded above $104.00 this morning GMT. With the release of the numbers, 175k against expectations of 170k, the price in Brent has maintained a support line of above $104 and is likely to be reactive and attractive to investors and speculators driving prices higher in the back drop of a weaker dollar. For the time being the dollar has remained within relatively tight ranges since the numbers.

 

Metals offered

 

The precious metals have shed some of its gains correlated to the price actin in the currency markets and the dollar. The dollar has grasped onto territory as the ef="">NFP’s offered a better print than which was expect by traders today. The numbers were slightly better, but good enough to see the dollar strengthen across the board, albeit only marginally in comparison to yesterdays slide. Gold is trading much lower though to the $1,387, near enough pairing the gains made yesterday after the dollar onslaught. Silver is trading 22.45 and below the support line for the year at lowest levels since 2010.

 

 

 

 

 

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Jun 7, 2013

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Flash: ECB less dovish – TD Securities

 

 

FXstreet.com (London) - Research teams at TD Securities explain that for the EUR, Draghi’s comments at yesterday’s ECB meeting may have been mildly less dovish than the market was anticipating, but that clearly didn't justify the huge move higher in EURUSD.

 

They suggested that within Europe it is worth noting the particularly strong German industrial production numbers this morning which set up Germany for quite a robust GDP figure in the second quarter and this continues to contrast activity in most of the Eurozone.

 

 

 

 

 

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Jun 7, 2013

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USD/MXN rebounds from 12.7000

 

 

FXstreet.com (Barcelona) - The Mexican peso is sharply appreciating against its northern neighbour on Friday, dragging the USD/MXN to session lows around 12.7000 after the Banxico left the refi rate unchanged.

 

Stronger MXN on Banxico, CPI

 

The Mexican central bank kept the lending benchmark intact at 4.0%, broadly in line with market expectations and somehow neutralizing the effects of better Payrolls in the US economy during May. Further data in the Aztec economy showed that consumer prices expanded at an annual rate of 4.65%, marginally higher than the 4.63% previous. As of writing, the pair is down 0.45% at 12.7463.

 

Short-term key levels

 

A breach of 12.6867 (MA200d) would bring 12.6101 (low May 30) and finally 12.4622 (MA21w). On the flip side, resistance levels align at 12.9016 (high Feb.260 followed by 12.9370 (high Jun.6) and then 12.9454 (high May 31).

 

 

 

 

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Jun 7, 2013

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Flash: USD/CAD ascension pauses – UBS

 

 

FXstreet.com (New York) - UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's commodity-based currencies and outline the technical positions.

 

In terms of the AUD/USD, “As there is an important support at 0.9388, the immediate risk appears to be for a short-term recovery to unwind these downside conditions. Resistance is at 0.9546 ahead of 0.9674, suggesting a bearish outlook.” In addition, in looking at the USD/CAD, the recent sharp sell-off tested support at 1.0169, a closing break below this would be negative, triggering a deeper sell-off to 1.0120 and then 1.0027 – resistance is at 1.0288.

 

 

 

 

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Jun 10, 2013

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EUR/USD keeps pushing higher, around 1.3270

 

 

FXstreet.com (Barcelona) - The EUR/USD accelerates its upside on Monday, posting once again session highs in the area of 1.3265/70.

 

Richard Kelly, FX Researcher at TD Securities, suggested, “Eurozone focus will likely revolve around the German Constitutional Court hearing the OMT case on Tuesday and Wednesday. The bias is likely somewhat negative for European sentiment as Eurosceptic once again hit the airwaves, Asmussen testifies against Weidmann, and stories have already circulated (though already denied) that the ECB could impose a limit on OMT purchases”.

 

EUR/USD is now advancing 0.47% at 1.3255 and a breakout of 1.3306 (high Jun.6) would open the door to 1.3319 (high Feb.25) and finally 1.3341 (61.8% of Feb.-Apr. slide). On a downside, support levels arise at 1.3103 (MA100d) followed by 1.3075 (low Jun.6) ahead of 1.3053 (low Jun.5).

 

 

 

 

 

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Jun 10, 2013

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US: Redbook Index fell 0.5% MoM

 

FXstreet.com (Barcelona) - The Redbook index contracted 0.5% on a monthly basis and rose 2.8% over the last twelve months in the week ended on June 2, against previous prints at 0.6% and 2.9%, respectively.

 

 

 

 

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Jun 11, 2013

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Higher yielding currencies at threat – TD Securities

 

FXstreet.com (London) - Research teams at TD Securities have suggested the higher yielding currencies that have benefited from QE in recent year are most at threat from less accommodation.

 

AUD and NZD in negative focus

 

They say this includes EM currencies in particular, and the AUD and NZD among the majors (AUD reaching fresh lows since September 2010, and the NZD at the lowest level since last summer). Furthermore, they say the soft data from Australia overnight did not help, but the real issue is the USD right now. The RBNZ on Thursday is not expected to help tame the NZD’s selloff either.

 

 

 

 

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Jun 11, 2013

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Flash: QE, the weak relationship between money growth and activity – Merrill Lynch BoA

 

FXstreet.com (London) - Michael S. Hanson, US economist for Merrill Lynch and BoA said the effectiveness of QE cannot be determined by the size of the Fed’s balance sheet or the growth rate of money.

 

He continued to say that the fact that the fastest growing sectors in the US during the current recovery have tended to be those that are most interest sensitive, including housing, autos, consumer durables and capex, suggests that QE has likely had some positive impact on the pace of growth.

 

He added that two other implications follow from the collapse in the money multipliers and the weak relationship between money growth and activity. First, he said, the Fed’s actions are not likely to lead to an increase in inflation unless inflation expectations become unanchored. And he explains, to date, if anything, inflation expectations have been edging lower, not trending higher despite QE1, 2 and now 3; Partly that reflects the deep recession and slow recovery that have kept inflationary pressures in check. But he suggests it also likely reflects the recognition that the Fed’s current balance sheet expansion ultimately will be temporary, although it may take some time to unwind. “Monetary theory tells us that it takes a permanent jump in the supply of money to get a permanent jump in the price level (with inflation in the interim adjustment), and a persistent, steady increase in the pace of money growth to get a persistent, steady increase in the inflation rate. The Fed’s exit strategy states that neither of these are planned, which appears to be credible to the markets so far given that inflation expectations have remained fairly stable”.

 

Second, as he explains, as the economy expands, the transaction demand for money should gradually return. “In other words, the traditional relationship between money growth and either real or nominal output appears to be one of reverse causation”.

 

He explains that although the direction of causality has been and likely will be debated for some time, in post-Volcker US data the correlation is highest between lagged income and future money growth. “So, while the current slow pace of money growth and collapsed money multipliers may not signal fundamental weakness in the recovery, they likely will rebound as the economy improves, with, perhaps, a long and variable lag”.

 

 

 

 

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Jun 11, 2013

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Flash: Expect a larger Japanese trade deficit in May - Nomura

 

FXstreet.com (Barcelona) - Nomura economists are estimating a larger trade deficit in May, with the first rise in real exports for two months.

 

They write, “We have estimated May imports and exports, which are scheduled for release on 19 June, using the trade statistics for 1–20 May published by the MOF on 7 June and the corporate goods price index published by the BOJ on 12 June. We estimate a nominal trade deficit of ¥1,232.7bn.” On a seasonally adjusted basis, they estimate a deficit of ¥963.5bn, larger than the deficit of ¥764.4bn in April. Further, they estimate a 1.1% m-m increase in real exports, the first rise for two months.

 

 

 

 

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Jun 12, 2013

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Flash: Toshin momentum is slowing for now - Nomura

 

FXstreet.com (Barcelona) - Nomura Strategist Yujiro Goto notes that Japanese retail investors had purchased foreign securities via toshins for three months in a row until May, but momentum is likely to be slowing slightly now.

 

He expects toshin momentum to remain strong this year thanks to better economic conditions in Japan, but recent market volatility is likely to slow the momentum for now. He writes, “To gauge the momentum going forward, the many new toshin launches investing in Japanese equities in foreign currencies and foreign equities later this month are worth monitoring.”

 

 

 

 

OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page

 

 

 

 

Jun 12, 2013

OctaFX.Com News Updates

 

 

 

 

 

image6-3_zpse24d6ba9.png

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