EUR/USD, EUR/GBP and USD/JPY encounter headwinds
EUR/USD and EUR/GBP rallies are taking a breather, so does USD/JPY.
EUR/USD does a ‘return to point of breakout’
Last week’s strong bullish trend reversal and rally in EUR/USD in the wake of the European Central Bank’s (ECB) hawkish stance has taken it to the January peak at $1.1482 which capped.
Today a ‘return to point of breakout’ is seen with the cross slipping back towards the breached 2021-to-2022 downtrend line at $1.1407. Below it, the late November and December highs at $1.1386 to $1.1382 may act as support as well as the mid-point of Thursday’s ‘body’ of its long bullish candle at $1.1368. The ‘body’ shows the distance between the open and the close of a candle.
The January and current February highs at $1.1382 to $1.1383 will need to be exceeded for EUR/USD to make further headway, with the October and 5 November lows at $1.1513 to $1.1529 being eyed in this scenario.
EUR/GBP’s strong rally stalls post BoE and ECB meetings
Last week EUR/GBP formed a double bottom following its strong rally, triggered by the ECB president Lagarde’s hawkish comments alluding to the possibility of a rate hike later this year.
The rally through the three-month downtrend line and above the January peak at £0.8422 bodes well for the bulls, with the 200-day simple moving average (SMA) at £0.8515 remaining in focus. First a slip back towards the 55-day SMA, January high and 23 December low at £0.8424 to £0.8416 may ensue, though. This support zone is expected to underpin.
Today, minor potential resistance sits at last week’s £0.847 high.
USD/JPY falters below the two-month resistance line at ¥115.46
USD/JPY (大口） bounce off the 55-day SMA at ¥114.42 last week took it to ¥115.43, marginally below the two-month resistance line at ¥115.46 which caps for now.
If bettered, the November peak at ¥115.52 and the late January high at ¥115.68 would be targeted, a rise above which would put the early January high at ¥116.35 back on the map.
Good support below the ¥114.97 mid-November high sits between the one-month support line, 55-day SMA and 2 February low at ¥114.46 to ¥114.16 with further support coming in at the 8 December high at ¥113.96.
Major support lies between the mid-to-late January lows at ¥113.48 to ¥113.47.
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