GBP/USD, retreats from $1.27, while dollar recovers against the yen and the Canadian dollar
A recent run of weakness for the US dollar has paused for now, with the greenback making some headway against sterling, the yen and the Canadian dollar.
GBP/USD bounce stalls at $1.27
GBP/USD reached a high of $1.27 last week, but has since dropped back.
This is perhaps the most sustained weakness since the rally began in late October. For the moment, we look for a pullback towards the 200-day simple moving average (SMA) that might create a higher low. A close back below $1.24 would begin to call the bullish view into question.
A rally back above $1.27 puts the buyers back in charge and could see $1.28 and higher tested.
USD/JPY pullback pauses
The current pullback with USD/JPY has seen the price drop to the 100-day SMA, and Monday saw the price open below this level for the first time since April.
A rally back above ¥148.00 might suggest that a higher low is in place and that a move back towards ¥152.00 might be underway. This would revive the uptrend of the past six months.
A close back below ¥146.00 hands the initiative to the sellers and might then see ¥144.93 tested. Below this lies the 200-day SMA.
USD/CAD rallies from 200-day moving average
The US dollar has revived against its Canadian counterpart, after a pullback from the November highs.
The bounce back with USD/CAD above the 200- and 100-day SMAs now clears the way for a test of the 50-day SMA from below, and would also create a higher low.
A reversal and close below C$1.348 would then open the way for a test of the September lows around C$1.34.
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