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First Down Day in Six For EUR/JPY

FOREX

The pullback from Tuesday's EUR/USD high has extended early Wednesday, with prices slipping comfortably through the 1.21 handle to set sights on the Feb 9 low at 1.2047. A break below here would be a bearish development, and increase focus on Tuesday's candle pattern which resembles a bearish shooting star.

The greenback is among the strongest in G10 so far today, with equities circling the week's lows and consolidating yesterday's (slightly) negative close for the S&P 500. This has buoyed JPY so far Wednesday, which is clawing back recent losses against a number of currencies, most notably EUR.

The front-end of the DM implied vol curve has seen some support, with the equity pullback helping arrest recent declines. 1m AUD/USD implied vols look to have bottomed after printing post-COVID lows earlier this week of just 8.97 points.

Focus for the rest of the sessions switches to data, with US retail sales, PPI and industrial production due. CPI numbers for January from Canada also cross. Central bank speakers include Fed's Barkin & Rosengren, BoE's Ramsden and the FOMC minutes.

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