EUR/USD rallies, GBP/USD slips while USD/JPY trades near 7-month high
Outlook on EUR/USD, GBP/USD and USD/JPY following hawkish Fed and dovish BoJ comments ahead of Thursday’s BoE rate decision.
EUR/USD nears $1.10 mark
EUR/USD jumped higher as Jerome Powell’s hawkish testimony to the House Financial Services Committee, in which he also said that rate hikes at a more moderate pace make sense, led to a drop in the greenback.
The currency pair thus nears minor psychological resistance at $1.10, above which beckons the 10 May high at $1.1007, followed by the 8 May high at $1.1053. Key resistance remains to be seen between the $1.1075 to $1.1095 mid- to late April highs.
Upside pressure should remain in play while this week’s low at $1.0893 holds. Slightly below it meanders the 55-day simple moving average (SMA) at $1.0886.
GBP/USD comes further off its 14-month high at $1.2848 ahead of BoE rate announcement
GBP/USD is seen slipping back from its $1.2848 14-month high, made last week, ahead of today’s Bank of England (BoE) policy meeting at which the central bank is expected to hike rates for a thirteenth time to 4.75% but given Wednesday’s worse-than-expected sticky inflation may have to shock markets and hike rates to 5.00%.
The one-month uptrend line at $1.2724 offers interim support ahead of Wednesday’s $1.2692 low. Below it sits the $1.2679 May peak which may offer support. If not, a slip back towards the $1.2599 to $1.2544 early to mid-June highs may ensue.
Only a rise above Wednesday’s high at $1.2802 would put last week’s high at $1.2848 back on the cards, a rise above which would open the way for the minor psychological $1.30 level to be reached.
USD/JPY trades near seven-month high
Dovish remarks by the Bank of Japan (BoJ) Governor Kazuo Ueda pressured the yen which trades at near seven-month highs versus the greenback.
The USD/JPY flirts with the late November 2022 peak at ¥142.25 which sits just below this week’s peak at ¥142.37. If overcome, the ¥145.00 region is likely to be attacked. Minor support below this week’s low at ¥141.22 can be spotted at the ¥140.93 May peak and also at the early June high at ¥140.45.
While Friday morning’s ¥139.86 low isn’t being slipped through, further upside pressure is likely to be seen.
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