GBP/USD, EUR/JPY and USD/JPY are on the up post FOMC minutes
Outlook on GBP/USD, EUR/JPY and USD/JPY as Japan returns from new year holiday.
GBP/USD tries to recover
GBP/USD’s slip from its five-month high at $1.2828, made in late December, took it to this week’s low at $1.2611 before it recovered.
Negative divergence on the daily Relative Strength Index (RSI) acted as an early warning signal for the sell-off which may now have run its course, though. While Tuesday’s $1.2611 low continues to hold on a daily chart closing basis, last Thursday’s $1.2701 low may be reached over the coming days.
A fall through the $1.2612 to $1.2611 support zone would put the 200-day simple moving average (SMA) at $1.2533 and the December low at $1.2501 on the cards, though.
EUR/JPY tries to regain lost ground
EUR/JPY, which dipped to ¥155.08 on Tuesday while Japan was shut for a new year holiday, tries to build on Wednesday’s gains now that people are back at work and probes the November-to-January downtrend line at ¥157.14. If overcome, the 11 December high at ¥157.68 would be in focus.
Support below Thursday’s ¥156.08 low can be seen along the December-to-January support line and the 200-day SMA at ¥155.30 to ¥155.16.
USD/JPY on track for third day of gains
USD/JPY continues to flirt with its 200-day SMA at ¥143.10 following hawkish Federal Open Market Committee (FOMC) minutes which pared back rate cut expectations and mentioned quantitative tightening (QT). The cross is in the process of breaking through its November-to-January downtrend line at ¥143.16 and has the September low at ¥144.45 in its sights.
Support below Thursday’s ¥142.86 low sits at the late July ¥141.96 high and at the 7 December ¥141.63 low.
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