The stronger-than-expected US CPI print only briefly managed to push EUR/USD lower as the price action yesterday is testament to negative bias on USD in the market with the outlook for significant widening of the US public deficit, according to analysts at Danske Bank.
“The downwards pressure on USD is also showing in USD/JPY which continues to trade on a heavy note. In the short term, we still see risks skewed to the downside for USD/JPY and EUR/JPY amid choppy market conditions and stretched short JPY positioning. Technically, next key support level in USD/JPY is seen at 106.51. Watch out for a reaction from the Bank of Japan, which seems to be the only place where USD/JPY could find some support at the moment.”
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