EUR/USD, EUR/GBP and USD/CNH as China remains in deflationary territory
Outlook on EUR/USD, EUR/GBP and USD/CNH as China’s consumer prices fall more than expected and as markets await Jerome Powell’s speech today.
EUR/USD remains side-lined
EUR/USD's minor consolidation below Monday’s near two-month high at $1.0756 is ongoing with it holding above its the 55-day simple moving average (SMA) at $1.0647 amid speeches yesterday and today by the US Federal Reserve (Fed) Chair Jerome Powell.
While the 55-day SMA underpins, medium-term upside pressure should remain in play. If not, the breached July-to-November downtrend line, now because of inverse polarity a support line, at $1.0596 may offer support.
Were Monday’s high at $1.0756 to be overcome, the 200-day SMA at $1.0804 would be targeted, together with the $1.0834 July low.
EUR/GBP recovers from Monday’s £0.8650 low
EUR/GBP'S descent from its £0.8754 late-October high has taken it to Monday’s £0.865 low from where the cross is currently recovering ahead of Friday’s UK Quarter three (Q3) Gross Domestic Product (GDP), September trade balance and industrial production data.
The next minor upside targets are the 2 November high at £0.8735 and the 20 October high at £0.874, ahead of the recent £0.8754 peak.
Good support can be spotted between the July and September highs and the 200-day SMA at £0.8706 to £0.869. While it underpins, upside pressure should remain in play.
USD/CNH tries to find support around the mid-September and October lows
USD/CNH tries to level out around its mid-September to October lows at CN¥7.2699 to CN¥7.2596 as China’s consumer prices fall more than expected with the cost of food declining the most in over two years.
The 24 October low and 55-day SMA at CN¥7.3016 to CN¥7.3070 represent immediate upside targets but may cap this week.
A currently unexpected drop through the CN¥7.2699 to CN¥7.2596 support area would push the September trough at CN¥7.2392 to the fore.
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