GBP/USD gains and EUR/GBP slides on stronger British pound while USD/JPY stays range bound
Outlook on GBP/USD, EUR/GBP and USD/JPY ahead of US CPI data.
GBP/USD rises for six straight days
GBP/USD’s rise from its early October seven-month low at $1.2038, for six straight days, remains on track to reach the July-to-October downtrend line at $1.2366 despite misses on UK industrial and manufacturing production as well as construction output data.
A rise and daily chart close above the three-month downtrend line at $1.2366 should put the 200-day simple moving average (SMA) at $1.2445 on the map.
Potential slips should find support between the $1.2271 late September high and Monday’s $1.2264 low. Further minor support comes in at the 27 September low at $1.2111 and Friday’s low at $1.2106. While these levels hold, an upside bias remains in play.
EUR/GBP slid through support at £0.8631
EUR/GBP's decline from its £0.8706 September high has taken it through its late September low at £0.8631 towards the late August high and the 55-day SMA at £0.861 to £0.8607 on general British pound appreciation.
Another potential downside target is the mid-September low at £0.857.
Immediate resistance comes in along the one-month tentative downtrend line at £0.8642 ahead of Thursday’s £0.8691 high. While trading below these levels, downside pressure should continue to dominate
USD/JPY remains side-lined around the ¥149.00 level
USD/JPY's sell-off from its 10-month high at ¥150.16 amid fears of Bank of Japan (BoJ) intervention fears took it to ¥147.29 in early October before the cross levelled out around the ¥149.00 mark.
Despite Japan machine orders falling by 0.5% in August, USD/JPY is little changed on Thursday. Only a fall through this week’s low at ¥148.17 would probably provoke a slide towards the ¥147.29 low taking place.
Likewise only a rise above Friday’s high at ¥149.53 would put the psychological ¥150.00 region back on the map. For now the medium-term bullish trend stays intact, though.
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