EUR/USD slips to six-week low while GBP/USD and USD/JPY hold
Outlook on EUR/USD, GBP/USD and USD/JPY amid softening Japanese inflation.
EUR/USD slips to six-week low
EUR/USD dropped through its 200-day simple moving average (SMA) at $1.0845 on Friday morning after the European Central Bank (ECB) kept its rates steady and maintained its hawkish stance.
The cross is now trading in six-week lows and is approaching the 6 November high and December low at $1.0756 to $1.0724 which represent the next potential downside target zone.
Minor resistance above the 200-day SMA at $1.0845 sits at the $1.0922 early-January low.
GBP/USD recovery is running out of steam
GBP/USD is seen giving back its recent gains which took it to this week’s high at $1.2775 despite UK consumer confidence hitting a two-year high.
Tuesday’s low and the 55-day SMA at $1.2649 to $1.2645 may thus soon be reached. Below this support zone lies the more significant $1.2612 to $1.2597 area which consists of the late-December to January lows.
Above Friday’s intraday high at $1.2716 lies minor resistance around Thursday’s $1.2742 high ahead of this week’s $1.2775 peak.
USD/JPY advance is taking a breather as Japan inflation subsides
USD/JPY last week rose to a six-week high at ¥148.80 but this week slid to ¥146.65 before stabilizing as Japanese core consumer inflation hit its lowest level since March 2022 and slid below the Bank of Japan’s (BoJ) 2% target for the first time since May 2022. This takes the pressure off the central bank to raise rates anytime soon.
While ¥146.65 underpins, the cross is expected to continue to advance within its 2024 uptrend channel with last week’s ¥148.80 high and then the psychological ¥150.00 region remaining in sight.
Were a slip through ¥146.65 to occur, though, the 5 and 11 January highs and 55-day SMA at ¥146.41 to ¥145.93 may be reached instead.
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