The Euro faced renewed selling pressure in the first week since the ECB announced a reboot of quantitative easing (QE), issuing the lowest close in two years against a basket of its major currency counterparts. Breaking down its performance suggests the weight of local monetary policy was not the driver du jour.
The lion’s share of losses was sustained against the anti-risk group within G10 FX: The Yen, US Dollar, and Swiss Franc. That speaks to broader risk-off forces at work. That downswing was tellingly triggered midweek in the aftermath of an FOMC rate decision that disappointed the markets’ ultra-dovish expectations.
EUR/JPY LONG (Buy)
ENTER AT: 118.690