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Forex Flash: Selling tone would prevail in EUR – Rabobank

FXstreet.com (Barcelona) - The single currency is extending its correction lower on Monday after a failed attempt to climb further ran out of steam around 1.2980
The bull attempt came after the bailout in Cyprus dragged the cross to session lows in the vicinity of 1.2880 overnight.

According to the last CFTC COT report, Strategist Jane Foley at Rabobank suggested, “EUR shorts declined modestly. Despite the better tone the ongoing uncertainties connected with the Italian election result and the news that Cypriot depositors may be taxed as part of the island’s bailout should keep the EUR on the back foot”.

The expert also added that USD longs rose last week after US data came in above estimates, prompting investors to think about a less dovish tone from the Fed in the future

Commodities Brief – Gold retakes 1600 level, commodities rally on increased demand outlook

Gold prices rebounded Monday after an earlier setback surrounding the drama currently unfolding in Cyprus, which sent the EUR plummeting against the USD. However, the mood recently has certainly been one that gold bulls welcome, as investors increased wagers on a commodity rally by the most in eight months as signs of a U.S. economic recovery bolstered the outlook for demand. At the time of writing, the yellow has stabilized above the key psychological 1600 level/former resistance at USD $1609.60 per oz., providing a new floor, from which investors can expect a modest recovery. Though gold ultimately is trading sideways currently, the next key resistance will be eyed at 1625, as well as the buildup to the FOMC Thursday – although no change in policy is expected.
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