EUR/USD, GBP/USD recover from multi-month lows while USD/JPY rallies towards ¥150.00
Outlook on EUR/USD, GBP/USD and USD/JPY ahead of Jerome Powell’s speech.
EUR/USD hovers above nine-month low as Q4 begins
Last week the US dollar, yields and oil price saw some minor retracement lower from their lofty heights which gave EUR/USD some breathing space and helped it recover from its $1.0488 nine-month low to last week’s $1.0617 high.
More important resistance sits between the May low and mid-September low at $1.0632 to $1.0636.
Last 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.
GBP/USD remains above six-month low
GBP/USD tries to recover further from last week’s $1.2111 six-month low ahead of Federal Reserve (Fed) Chair Jerome Powell’s speech this afternoon in which he may indicate that another rate hike is needed this quarter.
The September downtrend channel resistance line at $1.226 together with Friday’s high at $1.2271 represent initial upside targets.
Above these levels of minor resistance lies the $1.2309 May low and significantly further up meanders 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 put the minor psychological $1.20 mark back on the cards.
USD/JPY rises to new 10-month high
USD/JPY has risen to a new 10-month high at ¥149.82 despite Japan quarter three (Q3) business sentiment climbing the highest in five quarters. The cross is getting close to the psychological ¥150.00 mark, though, around which the Bank of Japan (BoJ) might begin to talk about currency intervention to prop up Japan’s currency.
Above the ¥150.00 level lies last October’s peak at ¥151.94. The July-to-October uptrend line at ¥148.76 should offer immediate support, together with Friday’s low at ¥148.53.
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 October uptrend remains valid.
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