EUR/USD under pressure while GBP/USD edges higher and USD/JPY stalls after recent gains
The euro has recovered against the dollar, though it remains under pressure. Sterling is also moving higher versus the greenback, while the dollar is holding firm against the yen.
EUR/USD falls below 200-day SMA
EUR/USD rebounded strongly on Friday, though it failed to move back above the 200-day simple moving average (SMA).
Since late September there has been a strong move to the downside, with only a brief rally earlier in October. However, this failed to move back above broken trendline support, and led to a fresh move below the 200-day SMA.
The move has wiped out most of the gains made since early August. A close back above the 200-day SMA might indicate a low has formed for the time being. August’s low at $1.0780 might offer support, while below this comes the June low at $1.0670.
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GBP/USD forms higher low
GBP/USD uptrend still looks in better shape, with positive divergence on daily stochastics providing hope of a sustained bounce.
While the price dropped below the early September low of $1.30 last week, it has since recovered. For the moment the selling appears to have been halted; the short-term bullish view remains intact unless we see a reversal back below $1.2970.
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USD/JPY stalls below ¥150.00
Having touched ¥150.00 last week, USD/JPY price now looks at risk of some short-term weakness.
Bullish momentum has faded over the past week, as noted by declining daily stochastics, though at present the sellers have been unable to gain much traction.
For the moment the price is holding above the August peak at ¥149.40; a close below this might trigger some more selling. Meanwhile bulls will be looking for a close back above the ¥150.00 level that could lead to a challenge of the 200-day SMA.
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