EUR/USD holds up better than GBP/USD amid US debt ceiling negotiations
Outlook on EUR/USD, GBP/USD and USD/JPY amid ongoing US debt ceiling negotiations.
EUR/USD recovers from near two-month low
EUR/USD's recent decline has taken it to a near two-month low on flight-to-safety flows into the US dollar due to ongoing US debt ceiling negotiations.
The cross is now trying to stabilise above Thursday’s low at $1.0761, made around the mid-March high at $1.076. Further down sits the 24 March low at $1.0714.
Resistance sits at the 10 April low at $1.0832, the previous week’s low at $1.0848 low, along the one-month downtrend line at $1.0868 and the 55-day simple moving average (SMA) at $1.0871. While below $1.0871, downside pressure should retain the upper hand.
GBP/USD remains under pressure amid ongoing US debt ceiling negotiations
GBP/USD’s two-week descent has last week taken it to marginally above the $1.2387 to $1.2345 mid- to late April lows and 55-day SMA which this week should offer support.
Support below $1.2345 sits at the mid-February high and early April low at $1.2275 to $1.227. In case of a minor bounce being seen on Monday, the $1.25 region may cap.
Only a currently unexpected bullish reversal, rise and daily chart close above last Wednesday’s $1.2546 high would put the late April high at $1.2584 back on the map.
USD/JPY retraces lower from its six-month high
After six consecutive days of gains, USD/JPY last week topped out at ¥138.74, and this week is likely to revisit the 200-day SMA at ¥137.11.
If slid through, the ¥135.13 to ¥134.77 early January, mid-March and mid-April highs may also be back in view.
Immediate resistance is at the ¥138.17 December peak.
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