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Forex pairs in this Article » AUD/USD, EUR/GBP, EUR/USD (Barcelona) - Kit Juckes, Global Head of FX Strategy at Societe Generale notes that the SPX is testing post-Lehman highs, the Yen is weakening and the Euro is back in fashion again.

He begins his morning summary by noting that regardless of whether Japanese markets are open or not, the Yen can and will weaken. With the BoJ meeting at the start of the week providing the main focus, he recommends that traders expect a continuation of the "jaw-boning and anti-Yen propaganda theme" until then.

Looking to the UK, he notes that the press were pretty gloomy about the outlook for the pound last week, a poor trade data, the risk of a credit downgrade and the MPC's dovish bias all weigh. However, these are not 'new' themes and with EURGBP pushing higher through resistance levels, 0.84 has become the next target.

Over in Australia, Juckes sees that data this morning showed a fall in home loans and investment lending, driven by a 10.3% fall in lending for new homes. He writes, "Thursday's employment data are the main highlight of the calendar this week in Australia and after another failure to break above AUDUSD 1.06, could have a significant impact on sentiment. We are wary of the data and if they are indeed soft, then the sense that AUD cannot get traction even in 'risk on' markets will gather momentum.!

Finally, looking at IMM positioning data, he sees that the speculative FX market got short Euros again in the week up to Jan 8th and he asks whether this tells us anything? He writes, "Perhaps, that a shift from net long to net short Euros
was accompanied with a small correction to 1.30, and provided the room for the subsequent rally to 1.3380. I expect the data will now show the market re-building Euro longs, but I still get the clear sense that the shorts are the weaker hands EURUSD 1.35 is the next target."
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