Important events today:

13:45 UTC – US: composite PMI.

The US Federal Reserve presented fresh statistics on the US banking system. Dollar liquidity decreased by $102.3 billion due to transactions by the US Treasury and the Fed. As the Fed is slowly reducing its bond portfolio it will have to reduce assets by $67bn by the end of the month and Janet Yellen’s agency will hold auctions for another $122bn.

Therefore, in the coming week the liquidity in the system could shrink by another $189bn, which is favourable for the strengthening of the US currency. Japan today presented inflation data for May – the core figure was 3.2%, which is still well above the BoJ’s target, with the monetary watchdog fearing interest rate hikes and claiming the situation is under control. As a result traders have no choice but to buy USDJPY on corrections.

Recommendations: Buy 141.50/141.20 and TP 142.40.