The euro kept falling, pressured by the divergence between ECB and Fed monetary policies. As a result the pair is now trading below 1.27. Thursday’s ECB meeting is now in focus, despite the weak TLTRO participation results, Draghi is not expected to cut interest rate further

EUR

The euro kept falling, pressured by the divergence between ECB and Fed monetary policies. As a result the pair is now trading below 1.27. Thursday’s ECB meeting is now in focus, despite the weak TLTRO participation results, Draghi is not expected to cut interest rate further (at this meeting at least) therefore the focus will be rather on the ABS and covered bond purchase plans. The outcome of the meeting will most probably help traders to assess how fast the EUR/USD will fall in the coming days and weeks as the pair remains a clear sell on rallies.

Forecasts about the pair are unanimously bearish and give the pair around 1.20 in the next six months. In a more short term horizon, technical analysts are looking at 1.266 as this week’s key target level as it corresponds to the low of November 2012.

USD

The euro kept falling, pressured by the divergence between ECB and Fed monetary policies. As a result the pair is now trading below 1.27. Thursday’s ECB meeting is now in focus, despite the weak TLTRO participation results, Draghi is not expected to cut interest rate further (at this meeting at least) therefore the focus will be rather on the ABS and covered bond purchase plans. The outcome of the meeting will most probably help traders to assess how fast the EUR/USD will fall in the coming days and weeks as the pair remains a clear sell on rallies.

Forecasts about the pair are unanimously bearish and give the pair around 1.20 in the next six months. In a more short term horizon, technical analysts are looking at 1.266 as this week’s key target level as it corresponds to the low of November 2012.

JPY

JPY keeps weakening, and it looks like USD/JPY is heading to 110. Apart from some corrections in the rally this trade looks rather one sided. However, despite the current strength of the pair we see two possible reversal factors that cannot be ignored; the first one is a possible pullback of the greenback while the second one would be flight to safe haven capital inflows supporting the JPY.