Westpac - EUR/USD: Our 1.26-1.27 target remains on track as specs continue to unwind EUR shorts. However it will be tough for ECB’s Draghi to beat expectations on Thu ahead of the German court ruling.
USD/JPY: Neither Fed rhetoric nor BoJ inaction are helpful but 77.65/78.00 is holding for now.
Asia: Weak data outcomes from the Asian region means that a dramatic move lower in USD/Asia pairs seems unlikely, even with the prospect of fresh policy stimulus from both the Fed and ECB. Moreover, any disappointment around Fed/ECB action (or lack thereof) could see Asian FX sentiment turn sharply. Support levels in higher beta Asian currency pairs like USD/KRW (1125-1130), USD/SGD (1.2400) and USD/MYR (3.09/3.10) should continue to hold in the period ahead.