Saxo Bank | May 23, 2014 06:22AM ET
EURUSD failed to continue along the comeback trail after a late rally on Wednesday fizzled yesterday. The market is looking ahead toward the EU elections this Sunday as an important input, though today’s German IFO certainly also has the potential to add volatility to the situation (more on that in Looking Ahead below).
Elsewhere, USDJPY and other JPY crosses pulled back into the range after a big false break mid-week as risk appetite remained relatively buoyant and US yields pulled a smidge higher. The rally hasn’t been overwhelming, however, and it would be easy to re-engage the bearish case if the pair crumbles back through 101.00 again. In EURJPY, the rally attempt has been even more modest and the 200-day moving average also looms there. Chart: EURJPY The EURJPY bearish move is still in play, especially with the Lagging Span line (Green) plunging well through the price line over the last 8-10 trading days. Note the 200-day moving average coming into play near the recent lows. Significant further downside consolidation remains in play if this recent rally in risk appetite fades again and if the euro remains soft.
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