EUR/USD edges down, while GBP/USD holds steady and USD/JPY rises
The euro has fallen back from last week’s highs against the dollar, while USD/JPY is moving up for a second day. GBP/USD is holding firm in a busy week for UK data.
EUR/USD falls back from highs
The price of EUR/USD has retreated from last week’s highs, though the uptrend is intact.
A higher high may well be created, reinforcing the uptrend, with a pullback towards the 50-day simple moving average (SMA) resulting from this short-term weakness. A strengthening of the US dollar would provide the fundamental catalyst for such a move.
A revival back above $1.185 would likely negate the higher high, and open the way towards the March 2022 highs at $1.146.
GBP/USD hovers around $1.22
GBP/USD has also seen bullish momentum fade over the past day, though not sufficient to reverse the nascent bullish view.
A move back below the $1.205 level would push the price below the 50-day SMA and suggest a potential reversal is in play, with a lower high being created. Buyers will want to see the price move on above the December high at $1.24.
This week’s UK consumer price index (CPI) reading may well provide the catalyst for such moves, with a weaker CPI acting to push GBP/USD lower.
USD/JPY edges up for a second day
A small bounce here with USD/JPY barely changes the bearish view, which has seen the price lose ground over the past month.
A recovery towards ¥132.00 might see further selling pressure develop, maintaining the downward trend. Further declines target the ¥126.60 level, last seen in May 2022.
This week’s Bank of Japan (BoJ) meeting may well see volatility increase, but a move above ¥133.00 would be needed to suggest that the downward move has run its course for now.
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