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What To Trade Now?: Long USD/JPY Or Short EUR/USD

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We still prefer dollar, longs against the yen to longs vs. the Euro.

EUR/USD looks like drifting down to 1.08 or so, but we’re still worried about how much Euro softness depends on the ECB crowding private sector investors out of European bonds and the Euro. We’ve written about how tapering of bond purchases could trigger a Euro bounce, but more broadly, a weaker currency was one of the major channels by which ECB policy has worked but if the Euro is now just range-trading and the ECB has virtually run out of ammunition, then we struggle to see a catalyst for another significantly lower.

By contrast, there are still lots of yen longs out there to squeeze as US rate expectations rise and B OJ policy is well-designed to help yield differentials widen in the favour of the dollar as long as the upward crawl in treasury yields goes on. The only concern is risk sentiment more broadly – I couldn’t make a credible case for Yen softness on a trump win..

SocGen maintains a long USD/JPY from 100.30.

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I am more in favour of a EURUSD short altough both pairs are fairly over extended. I would prefer to wait for a good pull back on the daily time frame before entering a trade
Its about money flow really if you look at it. If the momentum is down then look for shorts. Anticipating shorts on a up momentum is a bad idea.
Eur/Usd short-term correction might go up to 1.07 and Usd/Jpy downward correction may be limited. 
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