EUR/USD slips while GBP/USD recovers and USD/JPY rises despite risk of BoJ intervention
Outlook on EUR/USD, GBP/USD and USD/JPY into month and quarter end.
EUR/USD slips but is to end month and quarter up
EUR/USD is seen slipping back towards last week’s low at $1.0845 as German inflation rises more than forecast but US Gross Domestic Product (GDP) comes in far better than expected.
German consumer price index (CPI) rose to 6.4% year-on-year (YoY) in June, from a 14-month low of 6.1%, while US GDP for quarter one (Q1) 2023 rose to 2% compared to an expected 1.4%. EUR/USD thus continues to come off its June six-week high at $1.1012 and could reach the $1.0789 April low on a fall through $1.0845.
Minor resistance above the 55-day simple moving average (SMA) at $1.088 can be spotted at the 20 June low at $1.0893. Only a current unexpected bullish reversal and rise above Thursday’s $1.0941 high could put a bullish spin back on the currency pair.
GBP/USD bounces off support
On Thursday GBP/USD slid to $1.2591 on worries that the major UK utilities company Thames Water might have financial difficulties and could in future have to be nationalised.
Nonetheless GBP/USD is expected to end the month and quarter in positive territory with it bouncing off Thursday’s lows towards the mid-June low at $1.2768. Above it sits key resistance at last week’s $1.2841 to $1.2848 highs.
If this week’s $1.2591 low were to be slipped through, the $1.2544 early-June high could be revisited.
USD/JPY continues to trade in seven-month highs
Despite the risk of currency intervention by the Bank of Japan (BoJ) looming high over USD/JPY, its gradual advance is ongoing with the late October 2022 at ¥145.11 having practically been reached.
Above it lies the September 2022 high at ¥145.90.
Minor support below Thursday’s ¥144.14 low can be spotted at last Friday’s ¥143.87 high.
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