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While Euro would be the pair to watch over ECB, next big mover could easily turnout as Yen. Partially that would be due to move in Dollar, but largely that would be due to risk angle of it.
Yesterday as equities, especially European recovered from their two day slump, yen gave up gains and by today it is down almost 150 pips from its yesterday peak around 112.2 per Dollar.
So, the logic behind Yen moves lies
- If European Central Bank (ECB) take bold actions, that could spark another round of strong rally in global equities and fading of risk aversion, which would be further detrimental for Yen.
- On the contrary no or limited actions likely to boost Yen by sparking sell offs in equities.
Moreover, Dollar is likely to move in opposite with risk trend. In first case Dollar is likely to be stronger and weaker in the latter, boosting the movement in Yen.
Yen is currently trading at 113.6 per Dollar. Key resistance lies at 112.2 and 11.2 area and support lies at 114.5-7 area.
