EUR/GBP, GBP/USD and USD/JPY in the wake of softer US and UK inflation
Outlook on EUR/GBP, GBP/USD and USD/JPY as an increasing number of investors re-appraise their US dollar positioning.
EUR/GBP nears six-month high
EUR/GBP has resumed its recent ascent following softer UK inflation with last week’s £0.8755 six-month high being revisited. If bettered, the mid-April low at £0.8791 may represent the next upside target.
Support below the 20 October high at £0.874 comes in around the £0.8706 to £0.8701 July and September highs.
While the next lower Tuesday low at £0.8689 holds, the short-term uptrend remains intact.
GBP/USD slips on softer UK inflation
GBP/USD is seen trading back below the 200-day simple moving average (SMA) at $1.2442 after its foray to $1.2506 on weaker-than-expected US inflation and a falling US dollar, now that UK inflation also came in softer than anticipated on Wednesday.
The mid-October peak at $1.2337 may thus be revisited but could offer interim support. Further down minor support can be spotted at the $1.2288 late-October high and along the 55-day SMA at $1.2283. While the next lower $1.2188 low from last Friday doesn’t give way, the October-to-November gradual uptrend will remain intact, though.
Resistance is found along the 200-day SMA at $1.2442 ahead of Monday’s $1.2506 high.
USD/JPY heads back up towards the October 2022 peak
USD/JPY took a hit following a weaker-than-expected US inflation reading on Tuesday but formed another minor interim bottom at ¥150.05 on Wednesday before heading back up towards its October 2022 peak at ¥151.95.
Since the current advance is accompanied by negative divergence on the daily Relative Strength Index (RSI) and as the cross nears the October 2022 peak, the risk of Bank of Japan (BoJ) currency intervention over the weekend is once again increasing.
A slip through this week’s low at ¥150.05 would eye the late-October and early-November lows at ¥149.20 to ¥148.81. Further down lies the early-October low at ¥147.29. Were the October 2022 peak at ¥151.95 to be overcome, levels traded in June 1990 would be back in play such as the April 1990 peak at ¥160.35.
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