USD/JPY side-lined, EUR/USD and EUR/GBP approach minor resistance
USD/JPY nears minor support while EUR/USD and EUR/GBP rise towards resistance.
EUR/USD rises towards minor resistance
EUR/USD continues to gradually advance towards the 55-day simple moving average (SMA) at $1.0621 as fears of higher and faster US rate hikes ease after last week’s University of Michigan US longer-term consumer inflation expectations settled back from a 14-year high.
The mid-June and last Wednesday’s high at $1.0601 to $1.0605 represent immediate upside targets ahead of the 55-day SMA, a rise above which would engage the four-month downtrend line at $1.067.
A bullish bias should remain in play while the cross stays above last week’s $1.047 low. Only potential slips below Wednesday’s low at $1.047 could lead to the 17 June low at $1.0445 being revisited. Below it major support continues to sit at the $1.036 to $1.035 May and current June lows.
EUR/GBP still range trades below last week’s high at £0.8641
EUR/GBP continues to sideways trade below its £0.8618 May and £0.8641 last Thursday highs as the UK is plagued by 40-year high inflation and this weekend ended its largest ongoing rail strike in 30-years.
While the £0.8618 to £0.8641 resistance zone caps, Friday’s low and the three-month uptrend line at £0.8562 to £0.8552 remain in view.
Resistance above the £0.8618 to £0.8641 area can only be seen at the currency pair’s one-year mid-June high and the 200-week SMA at £0.8721.
Further consolidation below USD/JPY near 24-year high is at hand
USD/JPY still comes off its ¥136.71 near 24-year high, made last week, as the US dollar continues to depreciate slightly and the Japanese yen is benefitting from weaker oil prices, given that Japan is a big net importer, and as inflation in Japan remains above the Bank of Japan’s (BoJ) target rate for a second month in a row.
Negative divergence on the daily 9-period relative strength index (RSI) - which formed a lower low and thus did not confirm the higher high seen on the daily USD/JPY chart last week - led to the current minor countertrend move with the cross approaching its one-month support line at ¥134.02.
While the mid-June low at ¥131.50 holds, however, the medium-term uptrend remains intact. Minor resistance can be spotted at the 14 June high at ¥135.60. Only a currently unexpected rise and daily chart close above last week’s multi-decade high at ¥136.71 would engage the minor psychological ¥140.00 barrier and then the June 1991 peak at ¥142.80.
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