JPM: G10

From the FXWW Chatroom: Efficient market hypothesis has taken a hit this morning, as we continue to reel from the shocking mispricing in financial markets. The moves overnight are sizeable, and meet our forecasts (we saw GPBUSD at 1.32-1.35 on a leave vote), but we still think that client interest in the London session could see an overshoot to around 1.30 before the close of London trading. Medium term, the economic self-harm has been well documented, an overshoot towards 1.25 would be a fade in our opinion but we would stress the need to be flexible. While we were substantial net sellers of GBPUSD throughout the early hours of the morning, RM demand for GBPUSD is appearing here now. Elsewhere, while EURUSD will undoubtedly be under pressure in the medium term we expect the pair to be supported by EURGBP buying and weak US yields. Look for 1.08 to trade in forthcoming sessions, capped by 1.12.

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