Unicredit: FX Strategy - EUR, JPY

Quotes from Unicredit

We expect hopes for a lot of detail on the ECB's expanded APP to be disappointed and the impact of today's press conference likely to be neutral.

• EUR-USD: Yesterday's trading was dominated by both USD strength and EUR weakness. While the former remained supported by an ongoing increase in bond yields, implied money market future rates and the expectation of solid NFPs, the latter was the result of increasing nervousness in the run-up to the ECB meeting this afternoon.
  
  All in all, today's ECB meeting is likely to be EUR positive, without, however, supplying EUR-USD with significant strong tailwinds, as markets may swiftly turn their focus back to tomorrow's decisive US data.
  
  Due to EUR weakness, our long EUR-NZD at 1.4896 trade, initiated last Monday, was stopped out yesterday at 1.4680. We took a loss of 1.45% in spot terms and 1.47% in total.
  
  
• JPY: While USD strength is very broad-based, the JPY has still been able to resist.
  
  We expect USD-JPY to remain at around current levels for a while, given recent remarks by Etsuro Honda, one of prime minister Shinzo Abe's economic advisers, that USD-JPY may have reached the upper end of the comfort zone