EUR/USD, AUD/USD slide while USD/JPY appreciates on hawkish Fed minutes
Outlook on EUR/USD, AUD/USD and USD/JPY as FOMC minutes show that Federal Reserve remains hawkish.
EUR/USD continues to drift lower
EUR/USD decline from its $1.1275 July peak has taken it to a new five-week low at $1.0862 as the US dollar continues to appreciate following Wednesday’s Federal Open Market Committee (FOMC) minutes. These showed a "significant upside risks to inflation" leading to an expected rate cut to be pushed back to May of next year.
The $1.0834 July low is thus being targeted, ahead of the 200-day simple moving average (SMA) at $1.0791.
Minor resistance above the $1.08 mark comes in along the 55-day SMA at $1.0954. Further up lies the minor psychological $1.10 region around which it oscillated for much of August.
AUD/USD’s descent has taken the pair to a near ten-month low
AUD/USD decline is ongoing with the cross having so far slid to a near ten-month low at $0.6365 as Australia's seasonally adjusted unemployment increased to 3.7% in July from 3.5% in the previous month, the highest level since April.
The next downside target is the mid-October high at $0.6348, followed by the November low at $0.6273.
Minor resistance can be spotted at the $0.6459 May low.
USD/JPY trades in new nine-month highs
USD/JPY is on track for its ninth consecutive day of gains and trades at levels last seen in November 2022 while gunning for the psychological ¥150.00 region as Japan exports fall for the first time since February 2021, underscoring weak foreign demand as key markets like China weaken.
The continued advance in the USD/JPY pair is also due to a rising US dollar as the FOMC minutes showed that the Federal Reserve (Fed) remains hawkish.
The accelerated July-to-August uptrend line at ¥145.87 should offer support ahead of the June peak at ¥145.07.
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