EUR/USD, GBP/USD and USD/JPY as US yields surge to 2006/07 highs
Outlook on EUR/USD, GBP/USD and USD/JPY amid rallying US yields and lower Japan inflation.
EUR/USD levels out despite heightened Middle East tensions and rising yields
Despite ongoing Middle East tensions, a hawkish Federal Reserve (Fed) and rising US Treasury yields EUR/USD continues to range trade above last week’s low at $1.0496 but below last week’s high at $1.0639. A break out of this range today looks pretty unlikely at the moment.
A rise and daily chart close above $1.0639 next week would indicate that a bottom is being formed with the July low and 200-day simple moving average (SMA) at $1.082 to $1.0834 representing potential upside targets.
A fall through $1.0496 would engage the key $1.0484 to $1.0444 support area, made up of the mid-November high, 7 December and 6 January lows. It needs to hold for EUR/USD to be able to bottom out.
GBP/USD drifts lower towards its $1.2038 early October low
GBP/USD slide towards its early October seven-month low at $1.2038 is showing no signs of pausing as the greenback appreciates in line with surging US yields.
A fall through $1.2038 would put the psychological $1.20 mark on the map.
Minor resistance above last week’s $1.2123 low comes in around the $1.2216 to $1.2225 region which has capped the cross since last Friday. While below this resistance area, downside pressure retains the upper hand.
USD/JPY approaches the psychological ¥150.00 mark
USD/JPY nears the psychological ¥150.00 mark as Japan inflation drops to its lowest level in a year. Traders are reticent to take the cross above this psychological resistance for fear of Bank of Japan (BoJ) currency intervention. Marginally above ¥150.00 lies the early October high at ¥150.16.
Support can be spotted along the July-to-October tentative uptrend line at ¥149.42. While the next lower 17 October low at ¥148.85 holds, the uptrend remains intact.
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