TD Research discusses EUR/USD and USD/JPY tactical outlook in the near-term, and sees room for a lower EUR/USD and a higher USD/JPY.
"Both the EURUSD and USDJPY have made some subtle breaks of key moving averages that suggest some loss of momentum. Given the loss of data momentum, we think the EUR is the more vulnerable of the two, leaving some room to push back towards the low 1.20s.
We still like a setup where USDJPY pushes above 108, and we look to fade the rallies ahead of 109. In short, we see a bit more room for the DXY to nudge out a modest squeeze," TD argues.
Structurally, TD maintains a bullish EUR/USD and a bearish USD/JPY view in the medium to long term.