EUR/USD slips while USD/JPY rises as greenback appreciates, EUR/GBP rallies post EU/UK trade deal
Outlook on EUR/USD, EUR/GBP and USD/JPY amid rising US dollar and EU/UK trade deal.
EUR/USD’s rally is taking a breather as US dollar appreciates
EUR/USD’s rally on stronger-than-expected French and German preliminary consumer price index (CPI) data is running out of puff as the US dollar regains recently lost ground following the publication of US construction and manufacturing data and rising US yields, with the 10-year US treasury yield trading back above the psychological 4% level. The cross is thus slipping back from Wednesday’s $1.0691 high towards the $1.0613 mid-February low.
A fall through the next lower low seen at $1.0566 on Wednesday would call for the resumption of the February descent with the late February low at $1.0533 then being eyed, ahead of the $1.0484 to $1.0444 support area. It consists of the mid-November high, early December and January lows and is expected to hold when reached.
In case of a currently unexpected rise to above Wednesday’s high at $1.691 occurring, the 55-day simple moving average (SMA) at $1.0718 would be in sight.
EUR/GBP surges higher on weakening pound
Over the past few days EUR/GBP rallied strongly on the UK/EU post-Brexit ‘Windsor’ trade agreement to do with Northern Ireland which is pushing the pound sterling lower.
The cross so far rallied to Wednesday’s £0.8896 high, a rise above which seems to be on track which would then open the way for the £0.8928 mid-February high to be reached. Further up sits the early February peak at £0.8978.
Slips should find support between the 24 February high and the 55-day SMA at £0.8836 to £0.8828.
USD/JPY resumes its ascent
USD/JPY’s retest and then bounce off the February-to-March uptrend line on Wednesday has put the 200-day SMA at ¥137.25 back on the cards as the greenback strengthens further. The rise in the cross is taking place despite Japan consumer confidence edging up to a six-month peak and Japan capital spending rising by 7.7% year-on-year (YoY) in the fourth quarter (Q4) of 2022.
Further up lie the December highs at ¥137.85 to ¥138.17 which are also being targeted.
Immediate upside pressure should be maintained while Wednesday’s low at ¥135.26 isn’t being slipped through. Below this level sits the ¥134.77 January high and the 24 February low at ¥134.06. While it underpins, the February-to-March uptrend will remain intact.
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