EUR/USD rises, USD/JPY slips on Fed minutes US while EUR/GBP tries to stabilise
Fundamental commentary and technical analysis on EUR/USD, USD/JPY and EUR/GBP.
EUR/USD extends rally after Fed minutes
EUR/USD is on a three-day winning streak, helped by the US Federal Reserve (Fed) considering slower rate hikes to be appropriate in the current economic environment, as stated in Wednesday’s Fed minutes.
The cross thus trades back above its 200-day simple moving average (SMA) at $1.0395 and is gunning for its $1.0481 November peak as the US celebrates Thanksgiving. Further up lies key resistance between the $1.0615 late-June high and the $1.0638 March 2020 Covid-19 pandemic low.
Slips should find support around the $1.0368 August peak and the $1.034 November support line.
EUR/GBP stabilises above key support
The slide in EUR/GBP is ongoing with the currency pair now trading in three-week lows but holding above its solid support which sits between the mid- and late-October lows at £0.858 to £0.8572 ahead of Monetary Policy Members (MPC) Ramsden, Pill and Mann speaking in the course of the day.
As long as the £0.858 to £0.8572 support zone holds, a bounce back to the two-week downtrend line at £0.8689 is on the cards. Having said that, only a rise above Tuesday’s high at £0.8701 could lead to another up leg being made with the 55-day SMA at £0.8727 then being in focus.
Failure at £0.8572 would engage the 200-day SMA at £0.8532.
USD/JPY drops towards ¥137.68 mid-November low post Fed minutes
USD/JPY is seen heading back down towards its ¥137.68 mid-November low for the third consecutive day following Wednesday’s US Fed minutes which showed that a substantial majority of policymakers agreed it would soon be appropriate to slow the pace of interest rate hikes as they access the impact of its tightening policy on the economy.
A fall through the current-November low at ¥137.68 would put the early-August high at ¥135.58 on the map. Further down slithers the 200-day SMA at ¥133.86.
Immediate minor resistance can be made out around the minor psychological ¥140.00 mark and in the ¥140.29 to ¥140.80 zone where 14 to 18 November highs were made. Further minor resistance is tucked away at the ¥141.51 9 September low. Provided that this-week’s high at ¥142.25 isn’t overcome, the October-to-November downtrend remains intact.
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