Major FX pairs in a holding pattern

Major FX pairs continue to maintain tight ranges with no real catalysts to drive markets at the moment.

Even another round of positive US economic data was not enough to give the bulls impetus to push the greenback higher. USD/JPY managed to tick a bit higher and nudged through the 102 level to trade to a high of 102.14. However this move was only temporary and it wasn’t long before it dipped back below 102.

BoJ Governor Haruhiko Kuroda was on the wires this morning talking about forward guidance. Kuroda said striking a balance between the strength of the commitment and future policy flexibility is a critical point in debating forward guidance. It’s clear Japanese officials are going through an interesting time at the moment where they will have to determine the best way to proceed without overheating the economy. With that in mind the yen hasn’t done much at all today and the price action just remains choppy.

EUR/USD is another pair I’ve been watching closely this week and it seems traders are in wait-and-see mode as we head towards the June policy meeting. The investment community is expecting some comprehensive action now and the ECB has plenty of work to do over the next week.

Later today we have French consumer spending, German unemployment and import prices to look out for. It’s also important to monitor moves in bond yields closely for some direction in the single currency.

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