FXstreet.com (Córdoba) - FX markets appear to be moving into a 'summer trading' mode, with back-and-forth price action taking place largely within the recent trading ranges, according to the Wells Fargo team.
"In yesterday's remarks Fed Chairman Bernanke was pessimistic on the economy, saying the Fed was prepared to act further but offering few specifics", they say. "The initial equity market losses and US dollar gains suggested disappointment with Chairman's comments but soon gave way to more positive sentiment".
However, risk sentiment and the euro slipped once again on Tuesday "as markets take note of strongly-worded comments from German Chancellor Merkel who said that the 'European project' was at risk", they add. "While the near-term bias points to ongoing risk-aversion and favors the dollar, recent price action suggests that strong directional FX moves are struggling to gain traction".
"In yesterday's remarks Fed Chairman Bernanke was pessimistic on the economy, saying the Fed was prepared to act further but offering few specifics", they say. "The initial equity market losses and US dollar gains suggested disappointment with Chairman's comments but soon gave way to more positive sentiment".
However, risk sentiment and the euro slipped once again on Tuesday "as markets take note of strongly-worded comments from German Chancellor Merkel who said that the 'European project' was at risk", they add. "While the near-term bias points to ongoing risk-aversion and favors the dollar, recent price action suggests that strong directional FX moves are struggling to gain traction".
