EUR/USD, USD/JPY resume their trends post US unemployment data while EUR/GBP falters
Outlook on EUR/USD, EUR/GBP and USD/JPY post Friday’s US NFP data.
EUR/USD recovers strongly from last week’s Non-Farm Payroll lows
Following Friday’s US non-farm payroll (NFP) data, EUR/USD reversed its short-term downtrend from last week’s low at $1.0484 and is fast approaching its mid- to late December highs at $1.0715 to $1.0736, helped by Monday morning’s better-than-expected German industrial production data which came in at 0.2% for November versus an expected 0.1% and a revised 0.4% fall in October.
The $1.0715 to $1.0736 resistance area is likely to cap on Monday, if reached, but were it to be exceeded, the May 2022 peak at $1.0787 would be eyed next.
Minor support below Friday’s $1.0648 high is seen between the $1.0595 early-December high and the $1.0574 19 December low.
EUR/GBP slips after failed attempt to break through technical resistance
EUR/GBP is revisiting last week’s low at £0.8783, having failed to break through its October and late-December highs and thus resistance zone at £0.8867 to £0.8877 as the UK Halifax house price index showed the lowest growth since October 2019. The index increased 2% year-on-year (YoY) in December 2022, down from 4.6% in November. Compared to the previous month, house prices fell 1.5%, marking the fourth straight month of declines.
A slip through last week’s low at £0.8783 and the £0.878 21 October high may lead to the 55-day simple moving average (SMA) at £0.8703 being back in view over the coming days and weeks, provided resistance at £0.8867 to £0.8877 continues to put a lid on the cross.
Only a currently unexpected rise and daily chart close above the December high at £0.8877 would put the minor psychological £0.90 region back on the plate.
USD/JPY downtrend resumes
USD/JPY's minor bounce off its ¥129.52 early-January low last week faltered at ¥134.77, marginally above its late-December high at ¥134.50, meaning that the October-to-January downtrend remains valid as investors digest last week’s US NFP data and Japanese consumer confidence which increased to 30.3 in December compared to its November 2 ½ year low at 28.6.
The cross will remain in a clearly defined downtrend, with lower highs and lower lows being seen on the daily chart, while it trades below its recent highs at ¥134.50 to ¥134.77 on a daily chart closing basis.
The December 20 low at ¥130.58 is now in focus, followed by the minor psychological ¥130.00 mark while the early-December low at ¥133.63 may act as resistance this week.
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