EUR/USD and GBP/USD fall back while USD/JPY edges higher
Caution in early trading has seen the dollar move higher, pushing down EUR/USD and GBP/USD while lifting USD/JPY.
EUR/USD slips to three week low
Despite a weaker US consumer price index (CPI) reading that might have been expected to weaken the dollar, EUR/USD proved unable to move higher and remained stuck below $1.10.
Recent weeks have seen the $1.095 area hold as support, so a break below this might open the path to the 50-day simple moving average (SMA), or trendline support from the September-low. A break below this latter support would likely be regarded as short-term bearish, though the medium-term trend remains intact.
A revival above $1.10 could signal another attempt to move on above $1.11 and to new highs for the year.
GBP/USD weakens ahead of BoE decision
The GBP/USD pair pushed to its highest level in over a year on Wednesday, briefly moving above the late May 2022 high.
Pre-Bank of England (BoE) nerves held back any sustained upside however, though there was no sign of any real downside in the short term. The price has enjoyed a strong rally since April, after some sideways consolidation in March.
For the moment, the bullish view is firmly in place, and it would need a move back below $1.24 to suggest a deeper retracement is at hand in the short term.
USD/JPY stabilises after losses
Wednesday’s lower CPI figure prompted a reversal in the pair USD/JPY that has dented the uptrend of the past two months.
A test of trendline support from the January lows may result if the rest of the week sees further losses. A drop below ¥132.80 would mark a more bearish development and open the way to ¥130.00.
Buyers will need a move back above ¥134.30 to reverse this outlook and suggest another move back to the 200-day SMA could be in the offing.
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