EUR/USD, GBP/USD and USD/JPY all turn lower
Risk aversion has hit FX markets, with a flight to safety taking place, resulting in swift reversals in a number of currency pairs.
EUR/USD break higher suffers sharp reverse
A revival in the US dollar resulted in EUR/USD’s bounce being reversed yesterday, and with the price back below the 50-day simple moving average (SMA) of $1.2154 and daily stochastics rolling over the bearish view has been given a new lease of life, at least in the short term.
In the first instance we have rising trendline support from the February lows that may provide support, and then below this the 100-day SMA at $1.202. A move back above $1.22 negates this bearish view.
GBP/USD drops for a second day
The selling in other markets has hit GBP/USD, wiping out most of the move of the past week that carried the price to $1.42.
Further declines now seem likely, towards the rising 50-day SMA at $1.37, bringing the price back to this key zone that provided some volatility on the way up.
USD/JPY reverses from higher high
The USD/JPY price has pulled back from its latest higher high, leaving the uptrend firmly in place.
Further declines would target ¥105.50, the 200-day SMA, and then down to ¥105.00 and the low from earlier in the week. A bounce back above ¥106.40, around yesterday’s highs, would put the buyers firmly back in charge, but for now we will have to watch to see if there is any recovery from the early weakness, or whether more losses are on the way.
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