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Talking Points:

- EURUSD trapped between daily 21- and 34-EMAs, $1.0905-1.1040.

- USDJPY threatens losing uptrend from Jan-Feb swing lows.

- See the March forex seasonality report for trends in the QE-era.

Persistent selling across the USD-spectrum in the wake of the March FOMC meeting last Wednesday has brought the greenback squarely in line with perhaps its most significant mean reverting level over the past eight-months. The daily 34-EMA, which has defined the uptrend since last July and has held as support on numerous occasions in between, now faces a very real threat of losing its grip as the backbone of the US Dollar rally.

Perhaps most alarming for the US Dollar would be significant losses against the Japanese Yen, which has seasonally seen a weak end of March (stronger USDJPY as well as xxxJPY pairs) during the QE era. If the Yen were able to buck its weak seasonal tendency, it could bolster its profile for April, which coincidentally has been quite strong since 2009. This may in turn result in weaker US equity prices - USDJPY has traded side-by-side with US stocks since November 2012 - or decreasing interest rate differentials (as US yields fall and/or Japanese yields rise).

See the above video for technical considerations in EURUSD, GBPUSD, USDJPY, and the broader USDOLLAR Index.

Read more: Weakest CPI on Record Pushes GBP to Precipice of Breakdown

--- Written by Christopher Vecchio, Currency Strategist

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