Dollar strength weighs on EUR/USD and GBP/USD, and pushes USD/JPY higher
The euro and sterling have fallen back against the dollar, despite UK inflation that indicated a resumption of price growth. Meanwhile USD/JPY is climbing once again.
EUR/USD falters at $1.06
EUR/USD has recovered from its one-year low over the past week and is now testing $1.06 from below.
This was the low from April, so if the price can close above this then a further recover may develop, targeting the $1.0670 low from June. However, the steep losses of the past two months point towards a change of trend, and the price would need to close back above $1.08 to suggest that a longer-term recovery was possible.
GBP/USD stalls despite higher CPI
GBP/USD recovery over the past two sessions has helped to halt the selling, and for now the $1.26 level holds as support.
$1.2860 becomes the next level to watch, having been brief support on the way down. Longer-term, the price will head back towards $1.30 if it can sustain this upside. A close back below $1.26 puts the sellers in charge once more.
USD/JPY pushes back towards recent highs
USD/JPY rally from the September lows continues, with no sign of a slowdown as yet.
Last week saw the price falter and drop back below ¥154.00, but buyers stepped in and revived the bounce. For the moment the buyers are in charge, though the risk of Japanese FX intervention rises if the rally continues. In the short-term, a close back below ¥154.00 might signal that a pullback has begun.
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