EUR/USD and GBP/USD hold up while USD/JPY falls back following FOMC meeting
FX markets have seen EUR/USD edge back and USD/JPY come under pressure, while GBP/USD has held steady in the wake of a possible agreement between the UK government and its MPs.
EUR/USD turns back towards $1.17
A stronger dollar has pushed EUR/USD back from the highs of the week, but already some buying pressure is coming into play as the price nears the $1.17 area that has marked support since the end of July.
A more bearish view requires a close below this level, while a failure to accomplish this leaves the current range-bound outlook intact. Bulls will want to see a move through the lower high of $1.19 created this week and then back towards $1.20, the peak from the end of August.
GBP/USD still heading higher
News of a possible agreement between the government and rebel members of parliament (MPs) helped GBP/USD move back towards $1.30 yesterday, although we have seen some weakness overnight following the Federal Open Market Committee (FOMC) meeting and a stronger dollar.
However, short-term trendline support from last Friday’s low remains intact for now. Further gains target $1.30 and then $1.304, while a drop back below $1.29 could signal the beginning of a broader bearish view once again.
USD/JPY hit by vague Fed and more optimistic BoJ
USD/JPY found itself in the middle of a tussle between two central banks. The Federal Reserve (Fed) opted not to provide more detail on how its new average inflation targeting (AIT) policy would work, while the Bank of Japan’s (BoJ’s) upgraded economic assessment meant the dollar weakened and the yen rose.
The net effect has been to push the pair through a cluster of support levels to ¥104.80, the lowest level since the end of July. Further declines target ¥104.20 and the lows from the end of July, with the longer-term downtrend having reasserted itself.
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