EUR/USD, EUR/GBP weaker, while USD/JPY continues its ascent

EUR/USD weighs on minor support from $1.1387 to $1.1383 post German ZEW

EUR/USD is trading back in the middle of its November-to-January channel and probes the late-November and December lows at $1.1387 to $1.1383. A new impetus may be given by US players returning to the markets after Martin Luther King Jr Day and German ZEW economic sentiment data.

While the $1.1387 to $1.1383 support zone underpins on a daily closing basis, the two-month upside bias remains intact with the October to early-November lows at $1.1513 to $1.1539 still potentially being reached in the days and weeks to come. These are likely to stall the currency pair, though. Should this not be the case, the gradual uptrend may take it to the September low at $1.1563.

Minor support below $1.1383 can be found between the 8 and 16 December highs at $1.1360 to $1.1355. Below it lies the 27 November low at $1.1332.

EUR/GBP slips in the wake of UK jobs data

EUR/GBP briefly slid back towards this year’s low to date at £0.8324 following the UK unemployment rate coming in at 4.1%. The cross keeps returning to the 55- and 200-hour simple moving averages (SMA) at £0.8353 to £0.8348, having been rejected by £0.8364 in the Asian session.

This high was made close to the £0.8366 to £0.8373 resistance zone which the currency pair finds difficult to overcome since it has already been tested several times, as support late last year and as resistance earlier this year.

While the next higher early-January high at £0.8418 isn’t exceeded, the longer-term September-to-January downtrend retains the upper hand. A tumble through the current January low at £0.8324 would engage the December 2016, April 2017, December 2019 and February 2020 lows at £0.8313 to £0.8277, representing key long-term support.

Bullish reversal in USD/JPY is gaining traction following BoJ inflation outlook

USD/JPY continues its rise from last week’s ¥113.48 low, carried by the Bank of Japan’s (BoJ) upgraded inflation forecasts which flagged heightening chances the recent commodity-driven price hikes will broaden, while keeping interest rates unchanged.

The November peak at ¥115.52 will need to be exceeded, though, for the early January 4-year high at ¥116.35 to be back in the pipeline. Slips should find support along the 55-day simple moving average (SMA) at ¥114.33 and mid-December high at ¥114.28. Further, minor support can be found at the 29 November and 8 December highs at ¥113.96.