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Euro Futures Volatility Forecast (07/11/2010)

The volatility of the futures on the Euro is clearly signalling an augment of the variance. The drop forecasted 2 weeks ago was just the beginning of the retracement and we believe the TGARCH volatility could easily achieve readings around 1.5% – 2%.

The interest rate announcements and the QE2 programme strengthened the dollar against the euro which consequently plummeted from 1.420 to 1.405. The volatility seems to be in an uptrend and therefore the staff of HyperVolatility forecasts an ulterior downward movement of the Euro Futures prices which could be driven down to the 1.390 area.

We suggest to look for short opportunities and to carefully monitor this market because fast swings are quite likely to happen.

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