EUR/USD bounce to be short-lived, while GBP/USD holds firm and USD/JPY retracement halts for now
The euro managed a small bounce against the dollar, while the greenback is attempting to recover after a recent run of losses against the yen.
EUR/USD’s brief bounce may not last
Relief that the European Central Bank (ECB) did not pick a more aggressive inflation target gave the EUR/USD pair a small lift yesterday, reversing most of the losses of the past two days.
But the bearish view remains intact, unless the price can move back above $1.19 in coming sessions, when a more guardedly bullish view may develop. Sellers will be looking for a new move to the downside that takes out $1.18.
GBP/USD stabilising around recent low
The past week has seen GBP/USD dips below $1.376 find buyers, therefore, preventing any further downside.
Now the buyers need to step up and push the price back above $1.385, in order to firmly establish that a low has been created. The bearish view remains on ice until the price drops back below $1.374.
USD/JPY recovers around 50-day SMA
The USD/JPY’s retreat from the July high has carried it back to the 50-day simple moving average (SMA) at ¥109.80, with a dip below this finding buyers yesterday.
At present this looks like a retracement in the uptrend, which remains intact. A move below ¥109.50 would begin to negate this view, but for now a continued bounce from a higher low seems a likely development.
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