The continuing weakening of the USD remains in my opinion the main characteristic of the present FX market. We saw both USD/JPY and USD/CHF reach new historic lows last week and whilst there were significant bounces in both, calling an end to this trend would seem premature.
EUR/USD has risen sharply in the last few months with short-covering in pairs like EUR/GBP and EUR/AUD a main driver. More recently, EUR/JPY has also made a sharp move higher and only EUR/CHF remains under pressure.
In this environment, trying to sell the EUR/USD is going to be a tough proposition. It will of course always be susceptible to sell-offs but until something changes, buying dips is the path of least resistance.
For today’s session, 1.4200 is looking quite toppy and initial support levels start around 1.4125/30.
