EUR/USD is slightly lower than its closing level from Friday, currently trading near 1.3310, with the USD getting a modest boost from reported progress in debt-limit extension talks. Cable is starting to attract the attention of traders and it is trading towards the bottom end of its trading channel near 1.5850. A clean break below here could have a major impact on sentiment. EUR/CHF and EUR/JPY will remain highly volatile and the pressure remains bullish in both pairs, despite regular retracements.
The big event this week is the BOJ meeting, and weekend press reports suggest that the new Government is having some success in convincing the BOJ to issue a joint statement on an inflation target. The sticking point would seem to be the time-scale, whether the inflation target of 2% is a medium-term or long-term goal.