FXstreet.com (Barcelona) - According to Sebastien Galy, currency strategist at Societe Generale, "rising FX volatility has not yet mutated into a full blown correction, though the correction is deep." The analyst still sees USD/JPY a buy on dips around the 90 handle and EUR/USD should hold above 1.30.

Mr. Galy adds: "Nonetheless, gyrations in FX and now in equities are increasingly severe. Such tendency for sharp corrections seen as opportunities to buy on dips are similar to the market behavior in 2007 as we advanced every deeper into the subprime crisis. The next key test will be the sequester decision in the US which does not seem to be going in an encouraging correction."

"Disorderly moves in the JPY or CHF are likely to bring in a rapid response from the local authorities to break any thought of using their currencies as safe havens. Add to this bernanke’s speech to lawmakers on Tuesday will likely prove dovish and we may have the right elements for this correction to not mutate into something worse" the analyst comments.