EUR/USD and GBP/USD edge up while USD/JPY falters at ¥145.00 again
A pause in the dollar rally sees USD/JPY stuck below recent highs, but both the euro and sterling have made gains in early trading against the greenback.
EUR/USD rebound continues
After falling to a twenty-year low last month, the euro continues to rebound against the US dollar with EUR/USD.
This still looks very much like a counter-trend bounce that sees the price head back to the 50-day simple moving average (SMA), currently $1.1018 and then begins to falter. This would be in line with previous bounces since April, all of which have found it impossible to hold above the 50-day SMA.
This move could see the price head back to $1.01. Further targets lie at $1.02 and then $1.0374.
GBP/USD recovers $1.13
The GBP/USD continues to defy the doomsters with a recovery above $1.13. Its own counter-trend bounce remains intact, and if previous bounces are any guide there is still some potential for upside, even if it only reaches the 50-day SMA.
Like EUR/USD, the pound is still making lower highs and lower lows against the dollar, with the previous peak at $1.176 marking out the initial target for this bounce.
Both stochastics and moving average convergence/divergence (MACD) have room to move up to support this move, but selling the rallies still appears to be the approach here for this downtrending market, although it looks like for now there is still a desire to push the pair higher in the short-term.
USD/JPY stalls below ¥145.00
It does look like ¥145.00 is the ceiling in USD/JPY for the time being – repeated attempts to break higher have come to naught, despite the continued strength of the US dollar.
Indeed, it is perhaps precisely that we need a pullback in order for the trend to revive. The pair rallied hard from the August-lows, and now sits at some distance from the 50-day SMA (currently ¥139.15).
A pullback towards this level might ‘clear the air’, create a higher low and provide a springboard for fresh bullish momentum.
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