EUR/USD flatlines while EUR/JPY and USD/JPY resume their descents
Outlook on EUR/USD, EUR/JPY and USD/JPY amid lower volatility as the festive season approaches.
EUR/USD trades in sideways range
EUR/USD continues to trade below last week’s $1.1009 high, formed marginally below its November peak at $1.1017, in decreasing volatility as the festive season approaches.
The currency pair now flirts with its late-August high at $1.0945 while remaining above its $1.0889 low, made on Friday. Further minor support is found around the 14 November high at $1.0887 and the 22 November low at $1.0852.
Only a rise above the $1.1009 to $1.1017 recent highs would put the 10 August high at $1.1065 on the cards.
EUR/JPY resumes its descent
Earlier this week EUR/JPY saw a rapid ascent to ¥158.57, as the Bank of Japan (BoJ) stuck to its ultra-loose monetary policy and provided no guidance on whether it may move away from it next year, before resuming its medium-term decline.
The 11 December high and late-October low at ¥157.68 to ¥157.70 acted as resistance in what looks like an Elliott wave abc correction which is deemed to have ended at this week’s high. It should be followed by an eventual slip through the current December low at ¥153.18, provided no rise above ¥158.57 is seen.
On the way down potential targets are Thursday and Friday’s highs at ¥156.49 to ¥156.48., the 200-day simple moving average (SMA) at ¥154.56 and the mid-December low at ¥153.86. In case of a rise above ¥158.57 being seen, the 55-day SMA at ¥159.45 could be reached.
USD/JPY once more slips
USD/JPY's rally from last week’s ¥140.95 five-month low as the BoJ kept its short-term rates at -0.1%, and that of the 10-year government bond yields around 0%, took it to Tuesday’s high at ¥144.95 before the downtrend resumed.
USD/JPY is sliding to its 200-day SMA at ¥142.67 below which lie the 7 and 14 December lows at ¥141.63 to ¥140.95.
Minor resistance above Thursday’s ¥143.56 high can be spotted at Wednesday’s ¥144.10 peak and the late-August to September lows at ¥144.45 to ¥144.54.
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