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5 Apr 2013
Forex Flash: Ulysee, between Charybe to Scylla - Societe Generale
FXstreet.com (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale notes that this morning, he debated with a manager that while one may be a USD bull, the reality is that we are headed currently for a period of weaker data, leading to some USD under performance.
He writes, “This suggests a period of consolidation and the usual fun with squeezing over-extended positions. The only risk is that the EM/USD trades turn from a simple hedging exercise to a more brutal correction leaving the USD bid across the board. In the specific case of EUR/USD, jumping from one to the other feels a bit like jumping from Charybe to Scylla, really unappealing with a Japanifcation unimpeded by the ECB.”
He writes, “This suggests a period of consolidation and the usual fun with squeezing over-extended positions. The only risk is that the EM/USD trades turn from a simple hedging exercise to a more brutal correction leaving the USD bid across the board. In the specific case of EUR/USD, jumping from one to the other feels a bit like jumping from Charybe to Scylla, really unappealing with a Japanifcation unimpeded by the ECB.”