EUR/USD, EUR/GBP capped post Fed and BoE rate hikes, USD/JPY in 6-year highs on BoJ’s dovish stance
EUR/USD, EUR/GBP range trade in wake of US and UK central bank rate hikes while USD/JPY continues to appreciate in 6-year highs as BoJ kept rates unchanged.
EUR/USD capped by resistance following last week’s FED rate hike
EUR/USD remains below by its two-month downtrend line at $1.1107, after last week’s US Federal Reserve’s (Fed) funds rate hike by a quarter point to up to 0.5%, the first since 2018.
A rise above last week’s high at $1.1137 is needed, for the 55-day simple moving average (SMA) at $1.1243 to be back in sight.
Slips should find support around the minor psychological $1.1000 mark with further support found at the mid-March $1.0901 low.
EUR/GBP remains side-lined after last week’s BoE rate decision
EUR/GBP continues to trade sideways ahead of Wednesday’s February UK consumer price index (CPI) data which will be closely watched by market participants. Last week the Bank of England’s (BoE) hiked its base rate to 0.75% as it forecast inflation hitting 8% in April with worse to come as Ukraine’s war drives up energy prices.
The pair cross continues to sideways trade between the 200-day SMA and February peak at £0.8478, on the one hand and the 55-day SMA and March 11 low at £0.8361 on the other.
While the 11 March £0.8361 low underpins, the bulls remain in control with a rise above the recent £0.8478 high looking more probable. This would target the 20 December high at £0.8554.
USD/JPY trades in 6-year highs and nears the ¥120.00 mark
USD/JPY still trades in 6-year highs as the Bank of Japan (BoJ) last week left its key short-term interest rate unchanged at -0.1% and that for the 10-year bond yields around 0% despite inflation jumping to a near 3-year high.
The cross continues its ascent and nears the psychological ¥120.00 mark, albeit at a slower pace than a couple of weeks ago when it broke out of an ascending triangle.
Minor support is seen around the December 2016 peak at ¥118.66 and major support at previous key resistance, namely the ¥116.34 January and February highs which, because of inverse polarity, should act as support, if revisited at all that is.
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