Dollar weakness pushes down USD/JPY and allows EUR/USD and GBP/USD to hold on to gains
The dollar remains unsteady ahead of the US mid-terms, causing further losses for USD/JPY while giving EUR/USD and GBP/USD strength to hold most of their recent gains.
EUR/USD surge stalls
EUR/USD rebound over the past two days has carried the pair back to the 100-day simple moving average (SMA). This bounce has seen it recover trendline support from the late September low and break above the short-term trendline resistance that held in late October and early November.
Now the price must clear the 100-day SMA, and ideally hold above it, to target further gains, with the $1.02 level in sight. Sellers would be looking for a reversal back below the 50-day SMA as a sign that the downtrend has reasserted itself.
GBP/USD pushes back towards recent peak
GBP/USD has managed to bounce back above the 50-day SMA, and now a move back to $1.16 seems likely. Dollar weakness has allowed for a revival here, but it is far from clear whether the bounce has the strength to continue given the broader caution about the UK economy.
Further gains above $1.16 bring the 100-day SMA into view, and then on towards $1.176. As the downtrend is still extant for now, a reversal below the 50-day SMA would be a fresh bearish development, potentially opening the way to $1.05 or lower.
USD/JPY weakens towards 50-day SMA
USD/JPY short-term reversal continues here, pushing it towards the 50-day SMA again. This marks the most sustained decline in the pair since August, but leaves the uptrend intact for the time being.
A rebound from the 50-day SMA could be the signal that a new leg higher is underway, targeting ¥150.00 and higher. Further losses towards ¥141.00 would put further pressure on the uptrend, but not bring it to a complete halt.
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