EUR/USD, AUD/USD rally as USD/JPY slips on dovish Fed
Outlook on EUR/USD, AUD/USD and USD/JPY amid dovish Fed ahead of ECB and BoE rate decisions.
EUR/USD rallies on dovish Fed
EUR/USD has resumed its ascent as the US Federal Reserve (Fed) indicates three rate cuts in 2024, leading to a drop in the greenback ahead of Thursday’s European Central Bank (ECB) monetary policy meeting.
The late August high at $1.0945 is now in sight with the 14 November high at $1.0887 and the 22 November low at $1.0852 offering support. Further down meanders the 200-day simple moving average (SMA) at $1.0829.
AUD/USD rallies to five month high
AUD/USD rallied to a five-month high as a dovish Fed pushed the US dollar index to a four-month low while the Australian jobless rate hit its highest level in 1 ½ years.
The late July high at $0.6739 currently acts as resistance but a rise above it would engage the 27 July high at $0.6821. Slips should find support around the $0.6688 early December high below which sits minor support at Thursday’s $0.6663 low.
USD/JPY drops to five-month low
USD/JPY saw another sharp drop as the US Fed indicates that a top in the rate cycle has been reached and anticipates three rate cuts in 2024. This brought forward market expectations of a first rate cut from May to March and increased expected cumulative cuts to 150 basis points (bps) in 2024.
USD/JPY slid to ¥140.95, a level last traded at the end of July, and could extend its losses to the ¥138.07 to ¥137.25 July lows. Resistance above the 200-day SMA at ¥142.44 and Thursday’s ¥142.91 intraday high is to be found at the ¥144.45 September low.
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