EUR/USD, GBP/USD rallies and drop in USD/JPY take a breather
Outlook on EUR/USD, GBP/USD and USD/JPY following softening U.S. inflation amid upcoming industrial production and retail sales.
EUR/USD continues to trade in 17-month highs
To EUR/USD seven consecutive days of swift gains on the back of falling U.S. inflationary pressures could be added an eights as the greenback remains under pressure with the cross trading at levels last seen in February 2022.
The next upside target is the mid-February 2022 low at $1.128 but the currency pair may lose upside momentum below or around this level as the U.S. dollar may regain some lost ground on Tuesday around U.S. industrial production or retail sales numbers.
Potential minor support can be spotted around the March 2022 peak at $1.1185 and much lower down around the $1.1095 April high.
GBP/USD comes off 16-month high
Weaker-than-expected U.S. consumer and producer price inflation last week benefitted the British pound which rose to 16-month highs versus the greenback at $1.3142 on Friday with GBP/USD.
Earlier this morning a minor retracement lower was taking place but in no way threatened the strong uptrend.
If last week’s high at $1.3142 were to be overcome, the December 2021 low at $1.3162 might be reached, above which lies the $1.32 region.Minor support remains to be seen around the minor psychological $1.30 mark.
USD/JPY recovers from last week’s interim low
USD/JPY over 5% decline from its ¥145.07 high has found an interim bottom at ¥137.25 last week as some traders took money off the table on their shorts ahead of the weekend.
Last week’s low was made marginally above the 200-day simple moving average (SMA) at ¥137.01. Provided it underpins, a minor bounce back towards the ¥138.44 to ¥138.76 early June lows is expected to ensue.
Further up meanders the 55-day SMA at ¥139.70 which is also expected to act as resistance, were it to be reached at all. Immediate support sits at Thursday’s ¥137.93 low, followed by the March-to-July uptrend line at ¥137.30.
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