Forex Flash: EUR/USD rallies as selling opportunities while Italy is paused – TD Securities

According to TD Securities analysts, Fed Chairman Bernanke’s reassurances in QE have eased concerns that policy stimulus might taper off sooner rather than later. Also, there are hopes that the major Italian parties might be able to form a “grand coalition”, hence the stronger day for global equity markets.

“In Europe, the realization that a coalition government in Italy is the most likely outcome has put a bid under the EUR in the past two days, however, recent comments from the current Italian President indicate the process to form a new government will not be particularly fast—suggesting we may be in for two to three more weeks of Italian political uncertainty”, wrote analysts Shaun Osborne and Greg Moore, expecting a EUR rebound in the coming days, but the broader trend is still bearish for the weeks ahead. Rallies are seen as selling opportunities.