Japan's trade deficit rose nearly 10% in May to 993.9 billion yen (nearly $10.5B). Rising costs for imports due to the cheaper yen matched a 10% rebound in exports from a year earlier. A weakening in the yen's value has pushed up costs for imports of crude oil, natural gas and other commodities for this resource-scarce nation, but the deficit in May was bigger than most economists' estimates.

The JPY pairs are now characterized by noteworthy reversals, which give some low-risk selling opportunities. Other majors are either consolidating or retracing. In general, the major outlook is still valid.

EURUSD: The EURUSD is still in a bullish mode, as suggested by the indicators on the chart. The price line at 1.3400 is a forgone conclusion: the pair would soon be trading above it as it goes towards the resistance line at 1.3450. It is suggested that one should only seek to go long.

European car sales hit their lowest level for the month of May in 20 years as the region's recession dragged on. Passenger car sale demand for May dropped by 5.9% on the same month last year in the 27-country European Union to 1.042 million units, the lowest level since May 1993, when sales dropped below 1 million. For the first 5-months of the year, sales dropped 6.8% to 5.07 million.

What will happen with Indian Rupee, its continuously falling from the level at $53 to $59 with out making any normal correction of profit booking. Just recently Indian currency contracted to $59 against the US dollar before few trading sessions. In current scenario, Indian rupee is moving nearer to $57.68 which has shown some correction which is also called as some profit booking. In next, Indian currency is expected to move nearer to $56-57 for some time and may break ranges for higher volatility, but overall it will go above $60 in approx 5-6 months. Let us see which numbers are going to publish from Indian government. Previous horrible Indian data was completely negative for currency.

In spite of the current equilibrium phases in the markets, there is a tendency for currency instruments to respect the overall biases.  So when prices break out of the current equilibrium phases, it may be in the direction of those biases.

EURUSD: In the current equilibrium phase, the bullish bias is still on. So when the price resumes its significant move, it ought to be towards the north. The price is going towards the resistance line of 1.3400 – which is not a lofty target. The resistance line would probably be breached to the upside sooner or later.

The currency market instruments have been moving in a determined and predictable manner. The JPY pairs have been very weak, while the GBP and the EUR are strong. The USD is weak. However, there could soon be some pullbacks in the bullish biases. The pullbacks could be temporary or be the harbinger of new determined biases. The trader needs not repine as a result of this, as long as time-honored trading principles are employed.

Last week, the currency markets moved in a predictable manner. Although some retracements are imminent, it is probable that the dominant biases would continue this week.

EURUSD: This is a bullish market – there is a bullish trend on the chart. The market moved upwards recently and it is expected that it would continue to be so. The resistance line at 1.3400 is a target that should be reached very soon, albeit there may be some transient pullback toward the support line at 1.3300.

We are rounding off a week where USDJPY rose to a high of 99.30 before crashing to a low of 93.79, the Nikkei fell more than 6% and EURUSD and GBPUSD climbed to their highest level for four months. We will talk more about the events in Emerging markets in our Week Ahead report released later, but needless to say there was carnage in EM FX, which resulted in official intervention in Poland, Turkey, Indonesia, Brazil and India to stem the decline in their currencies.

So far in this week, the markets have moved in a predictable manner. The extant biases are still valid, though there may be temporary reversals soon.

EURUSD: Since a bullish signal was developed at the end of May 2013, the EURUSD has moved upwards by over 430 pips. Right now, the price is moving closer to the resistance line at 1.3400. This is not a far-fetched objective, but there may be a short-term reversal before the price ultimately reaches that line.

The dominant biases remain valid. The USD is weak. The GBP and the EUR are strong, while the JPY pairs are all weak. It is thus expected that the fundamental releases scheduled for Thursday would be in favor of the extant biases.

EURUSD:  This pairs has been trending in a predictable manner so far. Traders would therefore do well to continue looking towards the north, for there is still much optimism surrounding the Euro. This is a bull market, and the price could reach the resistance line at 1.3400 very soon.