EUR/USD and GBP/USD drop while USD/JPY slumps following hawkish BoJ meeting
While the dollar continues to gain against the euro and sterling, it has dropped sharply against the yen after the Bank of Japan lifted rates.
EUR/USD driven down by dollar strength
EUR/USD hit a new one-month low yesterday, falling below the 200-day simple moving average (SMA).
While it has stabilised in early trading ahead of tonight’s Federal Reserve bank (Fed) decision, the pair remains under pressure, and further declines will eat into the gains made since late June.
A recovery above $1.083 is needed to suggest that a low has formed.
GBP/USD edges down
GBP/USD continues to suffer losses, falling on Tuesday after bouncing off Monday’s lows.
Further losses would test the 50-day SMA, with a close below this reinforcing the bearish view. At present there is no sign of a recovery, but a close back above $1.287 might suggest that a new leg higher has begun.
USD/JPY drops through 200-day MA
A surprise rate hike from the Bank of Japan, which raised by 15 basis points to 0.25%, drove more downside with USD/JPY.
The price has reached the 200-day SMA for the first time since 9 January, and has broken below the ¥152.00 support area that it hit last week. Further declines head to the ¥150.00 level, while below this the ¥146.30 would be the next level to monitor.
A close back above ¥152.00 would be needed to suggest that a possible low was forming.
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