FX markets quiet ahead of US inflation figures
Today’s US CPI figures have kept activity in check across FX markets, especially with a Fed decision following close behind tomorrow.
EUR/USD close to recent highs
Gains have stalled around $1.05 in EUR/USD, but the bounce is still intact, with a potential trend change still in the offing.
While gains have slowed in recent days, we have not yet seen a turn lower that might suggest a resumption of the downtrend. Instead, this consolidation may well lead to further upside, with this view remaining in place unless we see a drop back below $1.03.
Additional gains bring the late May/early June highs below $1.08 into view.
GBP/USD pushes back towards $1.23
GBP/USD remains solidly above rising trendline support from the October low, and has yet to show any sign of a reversal.
The pair has run into resistance just below $1.23, but above this the May/June highs around $1.26 come into view.
For the moment the pair has pulled away from trendline support from the October lows, and a dip even as far as $1.17 would still leave the trendline intact.
USD/JPY edges higher once again
USD/JPY has continued to stabilise after its bounce off the 200-day simple moving average (SMA), but a firmer move below the 200-day SMA would revive and strengthen the bearish outlook.
The pair now waits to see if the Federal Reserve (Fed) and US consumer price index (CPI) can deliver a reason to continue to back the bounce from the 200-day SMA, and which might see the pair push on above ¥140.00.
Should the pair fail to move on above ¥140.00 a lower high could be established, one that would suggest a fresh decline towards ¥136.00 and lower.
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