EUR/USD, GBP/USD recover from multi-month lows while USD/JPY tops out
Outlook on EUR/USD, GBP/USD and USD/JPY as the US dollar slips on month-end profit taking.
EUR/USD recovers from nine-month low
As the US dollar, yields and oil price retreat from their multi-month highs at the end of September, EUR/USD recovers from this week’s low at $1.0488 towards the mid-September low at $1.0632.
This week’s nine-month low was made marginally above major support which consists of the mid-November high, early and December low and January low at $1.0484 to $1.0444.
Initial resistance comes in at last Thursday’s $1.0617 low and more important resistance between the May low and mid-September low at $1.0632 to $1.0636.
GBP/USD bounces off six-month low
End of month profit taking in the US dollar amid dovish talk by Federal Reserve (Fed) members Goolsbee and Barkin and better-than-expected UK gross domestic product (GDP) on the headline year-on-year (YoY) print, as well as the business investment metric have helped GBP/USD bounce off its six-month low at $1.2111.
Better-than-expected UK revised business investment numbers also aid the cross head towards its September downtrend channel resistance line at $1.228. Above this level minor resistance can be spotted at the $1.2309 May low and significantly further up along the 200-day simple moving average (SMA) at $1.2437. While remaining below it, the medium-term bearish trend remains intact.
A fall through the September low at $1.2111 would push the minor psychological $1.20 mark to the fore.
USD/JPY comes off its 10-month high
USD/JPY's 10-month rise has taken it to this week’s ¥149.70 high before topping out as end-of-month profit taking has led to a softening in the US dollar from its lofty heights.
Better-than-expected Japan preliminary industrial production also contributed to the cross slipping through its July-to-September uptrend line at ¥148.72.
Below it potential support can be found around the ¥147.87 early-September high. Further down lies last Thursday’s low at ¥147.33. While this minor support area underpins, the July-to-September uptrend remains intact despite the cross short-term topping out.
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