EUR settled softer across the board

EUR/USD

EUR settled softer across the board as market participants digested Draghi's comments on CPI. Of note, Draghi said inflation has eased and that inflation rates to fall below 2% in coming months. He also added that the ECB will monitor EUR level for inflation risk and wants to see if appreciation will alter CPI price risks. In terms of technical levels, supports are seen at the 38% retracement of the January to February advance, followed by the 21DMA line at 1.3425. On the other hand, resistance levels are seen at the 21DMA upper Bollinger level at 1.3659 and then at the 62% retracement of the May 2011 to July 2012 sell-off at 1.3836.

GBP/USD

Mark Carney who is due to replace BoE’s King in July, refrained from pushing for a higher inflation target and instead stated that the central bank should study how to implement exit strategy. Still, he said that changing economic circumstances could demand some flexibility in the horizon over which the bank seeks to restore inflation target. Furthermore, he added that the central bank may need to commit to highly accommodative policy even after the economy and inflation picks ups and when asked on FX, said that the central bank could intervene on exchange rate in an extreme scenario. As a result, the pair settled the session higher, also supported by a weaker EUR, which fell across the board following the press conference by Draghi. In terms of technical levels, supports are seen at 1.5578/67 and then at 1.5550. On the other hand, resistance levels are seen at 1.5805/79 and then at 1.5900.

USD/JPY

The pair settled the session lower, as risk-averse flows gathered momentum following the press conference by Draghi. In terms of the latest rhetoric by Japanese lawmakers, PM Abe said the government will present candidates for BoJ governor and deputy governors to parliament all at once. He added he wants the next BoJ governor to have skills and determination to defeat deflation. Japanese Finance Minister Aso says monetary easing is to escape deflation and is not competitive JPY devaluation. In terms of technical levels, supports are seen at 93.45/00 and then at the Tenkan line at 92.16. On the other hand, resistance levels are seen at 94.13 which is the 38% retracement of the June 2007 to October 2011 bear trade, followed by 97.81 (August 2009 high) and then the 50% level at 99.875.