EUR/USD moving higher, while GBP/USD bounce falters and USD/JPY holds at recent highs
The new week begins with the euro making headway against the dollar, but the pound’s bounce against the greenback is stalling. Meanwhile, against the yen the dollar looks set for further gains.
EUR/USD bounce still intact
EUR/USD has rallied off the lows of last week, moving back above $1.05, with a first target being $1.06 and then the 50-day Simple moving average (SMA) at $1.0628.
Above this, the price will move on to challenge $1.0637, followed by $1.0727 and then $1.0777. The broader downtrend is still firmly intact, but if the price can move back above this most recent lower high then hopes of a sustained bounce may develop.
A drop below $1.04 brings the lows of May and June at $1.0355 back into view as possible support.
GBP/USD recovery weakens
GBP/USD rebound around the Bank of England (BoE) decision last week fizzed out on Friday, with the price falling back from $1.2366. If it can recover this level and move on above the 50-day SMA (currently $1.2544) then perhaps a cautiously short-term bullish view may develop.
However, a longer-term bullish view would need the price to exceed the highs from late May above $1.26, the most recent lower high.
This month’s low around $1.1945 marks a key area for the pair, having broadly held since October 2016, aside from the dip during the height of the Covid-19 panic.
USD/JPY holds firm at highs
USD/JPY rebounds on Friday as the price has stalled, but the recovery remains intact after some brief mid-week losses last week. Just as the downtrends are in place for EUR/USD and GBP/USD, the rally for this pair is still firmly intact.
For the moment, upside momentum looks set to prevail, and new highs in the uptrend seem the order of the day. A reversal back below ¥132.00 would put the 50-day SMA at ¥129.75 back into view.
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