EUR/USD, GBP/USD and USD/JPY trade in low volatility
Outlook on EUR/USD, GBP/USD and USD/JPY ahead of this week’s inflation and employment data.
EUR/USD recovery muted
EUR/USD’s decline from its $1.1275 July peak has taken it to below the 200-day simple moving average (SMA) at $1.0811 to the March-to-August tentative uptrend line at $1.0766 last week ahead of Jerome Powell and Christine Lagarde’s key speeches at the Jackson Hole symposium.
Since then, a minor recovery to above the 200-day SMA has taken place with it being revisited on Tuesday morning as German consumer confidence came in weaker-than-expected at -25.5 in August versus -24.5 and -24.4 in July.
Were further downside to be seen and the tentative uptrend line not to hold, the May trough at $1.0636 would be back in the frame. Minor resistance above Tuesday’s intraday high at $1.0838 can be found at Thursday’s $1.0876 high.
GBP/USD bounce runs out of steam
GBP/USD’s decline from its $1.3142 July peak last week took it to a 2,5-month low at $1.2549 before regaining some lost ground earlier this week.
The medium-term trend remains very much bearish, however, and a fall through last week’s low at $1.2549 as well as the early June high at $1.2544 would engage the minor psychological $1.25 mark. Below it still beckons the 200-day SMA at $1.2408.
Minor resistance above Tuesday’s $1.2635 intraday high can be spotted at the $1.2679 May peak.
USD/JPY trades in low volatility
Despite Japan's government saying that it may be at an inflection point in its 25-year battle with deflation and unemployment rising to an unexpected 2.7% USD/JPY year-on-year (YoY), the yen hardly reacted and remained below Monday's ten-month low.
USD/JPY stays close to its ten-month high at ¥146.74, a rise above which would target the psychological ¥150.00 region. Minor support comes in along the July-to-August support line at ¥145.62.
A slip through this week’s low at ¥144.54 could lead to the early August high at ¥143.89 being revisited.
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