USD weakness lifts EUR/USD and GBP/USD, while USD/JPY falls back after strong gains
Some pre-FOMC dollar weakness is giving space for EUR/USD and GBP/USD to rally, while USD/JPY’s bounce from the March lows has hit a bump in the road.
EUR/USD back on the front foot
Upward progress has slowed, but the overall uptrend is still in place here with EUR/USD.
The price dropped back over the past week, falling back from the highs seen in late April. However, a conclusive turn lower continues to elude the sellers, and buyers have stepped in on weakness. As a result the bull case prevails, and we look for additional upside so long as the price holds above $1.09.
A move bearish view would need a move back below $1.09 at the least, though the medium-term view still remains generally bullish.
GBP/USD pushes higher
Here with GBP/USD too, the buyers have re-established control after a choppy start to the week.
A move back to the highs of last week seems likely, with further bullish impetus being given by the daily moving average convergence/divergence (MACD) turning positive once again.
This would then target a move towards $1.266, the highs from May last year. Sellers would need a move back below $1.227 at the least to indicate that a near-term bearish view prevails once again.
USD/JPY retreats from 200-day MA
After a run higher from the end of March, the price of USD/JPY has stalled at the 200-day simple moving average (SMA).
The huge gains of Friday and Monday have been unwound to an extent, as the price fails to move on above the 200-day SMA. This is perhaps not surprising, given the extent of the jump from last week’s lows, and does not immediately suggest that a more bearish outlook prevails.
However it does at least provide a possible near-term high for sellers, assuming a returning to at least trendline support from the January lows.
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