EUR/USD, GBP/USD and USD/JPY extend rebounds
Recoveries are underway in key FX pairs, with EUR/USD and GBP/USD having found support. USD/JPY is however approaching a critical juncture after recent gains.
EUR/USD steadies above $1.16
The EUR/USD pair appears to have found a floor for the time being at $1.16. Further gains now target trendline resistance from the September peak, bringing $1.175 into view.
Above this the next area to watch is $1.19, which held back progress in the middle of September. A reversal below $1.16 revives the bearish view.
GBP/USD marches higher
Despite mixed messages on Brexit and negative rates yesterday the GBP/USD pair has continued to rise from the $1.27 level. Further gains target the 50-day simple moving average (SMA) at $1.3026, this indicator having denoted the high water mark in the rally earlier in the month.
Having cleared trendline resistance from the September peak yesterday the buyers appear to be in control, with a drop back below $1.277 needed to hand the initiative back to the sellers.
USD/JPY rebound nears 50-day SMA
The bounce here has carried the price back towards the declining 50-day SMA (¥105.80) for USD/JPY. Since the second half of July this indicator has acted as a battleground for buyers and sellers, with the latter winning out in the end.
Gains have stalled as the price has climbed above ¥105.50, suggesting heavier going from here for the buyers. A drop below ¥105.20 could signal that a new downward leg has begun.
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