Traders seem to be looking for risk aversion trades which often manifest in going long USD and JPY. Both currencies rose against the EUR today as concerns about the Euro continued. There are continued concerns about a bailout for Greece and the state of their fiscal future; there are also worries about Portugal and Spain who also have high deficits.
EURUSD is still holding above the 62% retracement point of 1.3483 from the December highs and the declining channel that has formed over the last month is still holding.
The yen advanced versus the dollar on Monday. Last week the USDJPY tested the 200 day moving average for the second time this year; for the time being this is remains the resistance level for a break to the upside.
We should see volatility pick up on Wednesday and Thursday when Fed Chairman Bernanke Testifies and Unemployment Claims are released. Whilst there have been some strong moves up in the last two weeks, the USDJPY remains in a downtrend for the time being.
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