EUR/USD surges to five-month high while EUR/JPY resumes its descent
Outlook on EUR/USD and EUR/JPY amid depreciating US dollar and solid Japan industrial production and retail sales data.
EUR/USD trades in five-month high
EUR/USD is on track for its fifth straight day of gains as the greenback continues to depreciate amid a strong US bond auction and falling yields which brought forward rate cut expectations on Wednesday.
The 27 July high at $1.1149 represents the next upside target ahead of the $1.1275 July peak.
Good support below the $1.1065 August high can be seen between the accelerated December uptrend line at $1.1044, the November peak at $1.1017 and the mid-December high at $1.1009.
EUR/JPY resumes its descent
On Wednesday EUR/JPY didn’t quite manage to retest its ¥158.57 19 December high and instead resumed its descent after stronger than expected Japan industrial production and retail sales add weight to the argument for tighter monetary policy from the Bank of Japan (BoJ) while US rate cut expectations were brought forward after another successful bond auction.
Last week’s low at ¥156.13 is thus back on the plate, a fall through which would engage the 200-day simple moving average (SMA) at ¥154.87.
Good resistance above Thursday’s ¥157.47 intraday high can be seen along the November-to-December downtrend line at ¥158.12 and the recent mid- to late December highs at ¥158.39 to ¥158.57.
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