EUR/USD, GBP/USD slip and USD/JPY rises as US dollar regains lost ground
Outlook on EUR/USD, GBP/USD and USD/JPY as the US dollar stages a recovery rally amid stabilizing Treasury yields.
EUR/USD slips through uptrend line
EUR/USD’s reversal off Wednesday’s four-month high at $1.1017 gained traction on weaker-than-expected eurozone inflation data which brought forward European Central Bank (ECB) rate cut expectations for next year and led to a sharp drop in bond yields.
The fall through the October-to-November uptrend line at $1.0923 has the 22 November-low at $1.0853 and the July-low at $1.0834 in its sights. Together with the 200-day simple moving average (SMA) at $1.082 this area is expected to act as support, though.
Resistance above the breached uptrend line, now because of inverse polarity a resistance line, at $1.0923 can be spotted at the $1.0945 late August-high. Further up sits the 21 November-high at $1.0965.
GBP/USD comes off near three-month high
Earlier this week GBP/USD made a near three-month high at $1.2733 before losing upside momentum and slipping back to its steep November uptrend line which so far offered support.
A fall through Thursday’s low at $1.2604 would put the late June low at $1.2591 on the map, below which the late August-low sits at $1.2549.
Resistance above this week’s high at $1.2733 lies at the late August peak at $1.2746.
USD/JPY’s recovery off its ¥146.68 low is ongoing amid weak Japan data
USD/JPY’s recovery from this week’s low at ¥146.68 is ongoing as Japan factory activity shrinks the most in nine months with the one-month resistance line at ¥148.68 being eyed.
Further up sit minor resistance at the ¥148.81 late October low and the ¥149.20 early November low.
Support below Friday’s ¥147.60 low can be seen at the ¥147.29 October trough ahead of this week’s ¥146.68 low.
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