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EUR/USD has been on a tear, enjoying the ECB minutes, the German coalition, the unimpressive US inflation report, and more. However, it could take a break here:

Here is their view, courtesy of eFXnews:

TD Research discusses EUR/USD outlook and warns from chasing the pair higher around current levels.

“The EUR signal is starting to show that EUR longs are getting stretched, though its still trading fairly close to our HFFV estimates.  We still like the EUR, but would caution new longs on chasing the rally since it starts to look stretched on valuation models around 1.2350,” TD argues.

On USD/JPY, TD notes that the  breakdown in the old correlations (equities and rates) has seen the pair punch through the 111 level.

“The next key level to watch near-term is 110.15.  We maintain our USDJPY short*, as 107 beckons and believe that short CADJPY is also a good hedge on BoC,” TD adds.

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