Following the positive outcome of Friday's European Bank stress tests, the euro shot up to a 7-week high against its Japanese counterpart during the morning trading session. The pair has since seen a slight downward correction and is currently trading around the 112.60 level. The yen was not the only currency to take losses following the stress tests. The U.S. dollar has tumbled not only against the euro, but also against the British pound. GBP/USD has gone up almost 200 pips since the release of the stress test results, and currently stands at the 1.5500 level.

This afternoon, a lack of news events will likely lead to a continuation of the low volatility in the marketplace seen throughout the morning. At the same time, traders will still want to pay attention to the U.S. New Home Sales report, set to be released at 14:00 GMT. Analysts are predicting a slight increase in home sales from last month, which if true, may give the greenback the push it needs to recoup some of its recent losses. Traders are advised that if the report comes in at or above the forecasted figure of 317K, the greenback could see some gains on its main currency rivals.