USD/JPY ascent paused while EUR/USD and EUR/GBP slip

EUR/USD slips as June draws to a close

EUR/USD’s failure along the 55-day simple moving average (SMA), now at $1.0601, has led to a sharp sell-off, taking the cross back towards its $1.036 to $1.035 May and current June lows as the Federal Reserve (Fed), chair Jerome Powell, reiterated the need to combat inflation even if it meant risking ‘some pain’.

Powell also stated during the European Central Bank’s (ECB) annual conference that the US economy remains in good shape and is well positioned to withstand tighter monetary policy, although there is a risk it will slow down.

Immediate EUR/USD resistance can be spotted at the 22 June low at $1.0469 today and further minor resistance at yesterday’s $1.0535 high.

While the next higher late-June high at $1.0615 caps, the long-term downtrend remains intact with a fall through the $1.036 to $1.035 zone remaining on the agenda. If it were to occur, a descent towards parity cannot be ruled out.

EUR/GBP comes off this week’s high at £0.8661

EUR/GBP continues to trade below its £0.8618 May and £0.8661 Wednesday highs as the UK is plagued by 40-year high inflation, last week’s largest ongoing rail strike in 30-years, barristers striking and rail, tube, bus and airport workers as well as doctors planning to strike over the summer.

While the £0.8618 to £0.8641 resistance zone caps, the three-month uptrend line at £0.8570 and Friday’s low at £0.8562 remain in focus.

Resistance above £0.8661 can only be seen at the currency pair’s one-year mid-June high and the 200-week SMA at £0.8721.

USD/JPY trades near its 24-year high

USD/JPY consolidates below its ¥137.00 near 24-year high, made yesterday, as the US dollar depreciates slightly and the Japanese yen is benefitting from weaker oil prices - which are heading for their first monthly drop since November -, given that Japan is a big net importer.

Negative divergence on the daily nine-period relative strength index (RSI), which formed a lower low and thus did not confirm the higher high seen on the daily USD/JPY chart yesterday, may lead to at least a minor countertrend move with the cross perhaps soon approaching its one-month support line at ¥135.07.

While the mid-June low at ¥131.50 holds, though, the medium-term uptrend remains intact.

Minor resistance above this week’s high at ¥137.00 comes in along the minor psychological ¥140.00 mark with further resistance sitting at the June 1991 peak at ¥142.80.