After several unsuccessful attempts to overcome the 1.21 level in the EURUSD we are now in a correction / consolidation phase that should find support at the 1.1940 levels and lower at 1.1880.
This correction of the euro is also favored by the fall and break of important levels against some crosses such as the AUD, the NZD (which return to November levels), the JPY or the GBP, with a generalized drop in the volatility that returns to 2014 levels for the case of the year in the EURUSD. Additionally, the long speculative positioning on euros has reach the highs of 2013, which is another obstacle for the bulls in the European currency.
During the night the USDJPY has corrected more than half a figure after being reported the cut in the JGB (Japanese bonds) purchasing program of 10bn JPY in 0-25 years and 25-40 tenors. Some investors interpret this movement as a first signal towards a gradual exit from the QE of the BoJ.
Highlight Bostic statements (with voting rights), its base scenario is two to three additional hikes this year also highlighting some prudence for low inflation.
Another pending issue within the Fed is the White House's vice president's nomination. Apparently Richard Clarida and Mohamed El-Erian would be the most likely candidates to succeed Fischer.
The day comes without considerable macro data highlighting the appearance of Kashkari of the Fed (16: 00h without the right to vote).
Buy USDCAD at market 1.2435 - TP 1.2750 - SL 1.2350
Sell USDJPY at market 112.90 - TP 110.25 - SL 114.25
Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria
