EUR/USD turning higher and USD/JPY rolls over once again
US dollar weakness looks set to continue, with EUR/USD turning higher and USD/JPY rolling over to continue recent trends.
EUR/USD uptrend holds, as Spain CPI brings inflation hope
EUR/USD remains within a bullish uptrend despite market jitters raising questions over a potential rebound for the dollar. Thus far that move is yet to occur, with the significant differential between US and eurozone inflation giving one signal that we could see the European Central Bank's (ECB) continue to tighten beyond the Federal Open Market Committee (FOMC).
However, this morning has seen the Spanish Consumer Price Index (CPI) reading provide hope that inflation will continue to move lower in Europe, falling 1% to a 13-month low of 5.8%.The reaction for EUR/USD has been largely positive, with the pair on the rise. This lines up with the wider bullish trend, with a decline through $1.0606 required to bring a more negative outlook. Until then, further upside is expected.
USD/JPY turns lower to continue bearish trend
USD/JPY has started to erode the recent rebound seen over the festive period. That rebound always looked at risk of another turn lower, despite having taken place from the key historical support level of ¥130.40. A move up through the ¥138.27 level would bring about a more positive outlook for the pair.
However, until that happens it looks likely that we will see further downside from here. From an event risk perspective, the Chicago PMI brings the only event of note, with the new year bringing a week that will be dominated by US jobs data.
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