EUR/USD and GBP/USD move up, while USD/JPY weakens
A weaker dollar has given the euro and sterling space to rally, while USD/JPY has dropped back.
EUR/USD recovery continues
The counter-trend move in EUR/USD continues, as the dollar weakens to an extent and provides the euro with the space to move higher. Expectations of a 100-basis point (bp) rate hike in the US next week have been reined in as well, causing the dollar to ease back.
The bounce is still firmly a retracement within the broader downtrend. Initially, we could see the price move towards the 50-day simple moving average (SMA) at $1.0474. Ultimately, however, the longer-term bearish view remains in place.
GBP/USD bounces
A small bounce here has seen GBP/USD recoup some lost ground, although as with EUR/USD the price remains firmly in a downtrend.
For the moment, further gains may target $1.208, and then on to the 50-day SMA, currently $1.227. However, this move higher is likely to be short-lived, unless we see a rally above $1.24.
USD/JPY edges lower, but uptrend intact
USD/JPY continues to make headway overall, and remains solidly above the 50-day SMA, which is also rising. The dollar remains firmly strong, with no sign that the price is about to reverse.
Overall further upside seems likely, with dips continuing to be bought, and a deeper pullback as yet appears unlikely. Should one materialise, however, the price will target ¥135.00, and then down to the 50-day SMA at ¥133.00.
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