EUR/USD and GBP/USD keep rallying, while USD/JPY comes under fresh pressure
Dollar weakness is driving EUR/USD and GBP/USD higher, while USD/JPY has fallen as the yen strengthens on more strong Japanese data.
EUR/USD surges to two-month high
The EUR/USD rallied to its highest level since mid-January on Friday, continuing its recovery from February’s low.
Since then the price has broken through trendline resistance, and moved back above the 100-, 200- and now the 50-day simple moving average (SMA). The rally has carried the price back above $1.09, and the next target becomes the $1.10 highs from November.
A pullback towards $1.086 might see rising trendline support from the February low tested.
GBP/USD continues to rally
The GBP/USD has also enjoyed a good bounce over the past week, which has finally carried it above the December and January highs around $1.28.
From here, a move towards $1.30 can be contemplated. Some consolidation now back below $1.28 might not dispel the bullish outlook entirely, and even a further dip towards $1.2680 would still likely test rising trendline support from early February.
USD/JPY nears 200-day moving average
The USD/JPY rally from the January low has taken a sharp knock, with the price dropping back to its lowest level since early February.
This was already underway last week but commentary from the Bank of Japan (BoJ) about an earlier than expected exit from negative rates saw the yen strengthen further, and today’s GDP data, which showed that Japan avoided a contraction in quarter 4 (Q4), has given traders further reason to buy the yen.
The 200-day SMA becomes the next target to watch for support, while below this comes the ¥145.00 level. A rebound back above ¥148.00 might provide hope that a further recovery is underway.
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