EUR/USD, EUR/GBP steady while USD/JPY resumes its descent
EUR/USD, EUR/GBP stabilise while USD/JPY slips as BoJ warns of inflationary pressures.
EUR/USD steadies amidst a weaker US Dollar
EUR/USD is trading back towards the lower end of its November-to-January channel whilst so far holding above this week’s low at $1.1315 and the channel support line at $1.1302.
A minor bullish retracement back towards the late November and December highs at $1.1383 to $1.1387 may thus ensue. While the cross stays below the last reaction high at $1.1435, the bears should retain the upper hand, though.
A slide through the channel support line at $1.1302 would probably lead to the late December and early January lows at $1.1274 to $1.1272 being revisited. Below these levels lies the mid-December low at $1.1222.
EUR/GBP levels out above yesterday’s low at £0.8313
Yesterday EUR/GBP briefly made a new year-to-date (YTD) low at £0.8313 as traders welcomed UK government plans to lift Covid-19 Omicron restrictions from next week onwards.
Downside pressure is currently being maintained with the December 2016, April 2017, December 2019 and February 2020 lows at £0.8313 to £0.8277 likely to be revisited. This area represents key long-term support and will probably again hold, if tested. Only if slid through, would the way open up for the next lower April 2016 high at £0.8118 to be reached.
From a wider perspective, a break back above this week’s high at £0.8379 would be required to bring a more neutral picture into play.
USD/JPY back in the doldrums as BoJ flagged broadening inflationary pressures
The Japanese Yen is clinging to gains over the past two sessions, as the Bank of Japan (BoJ) warned that inflation may accelerate faster than anticipated.
USD/JPY (大口） is gradually drifting lower towards the 29 November and 8 December highs at ¥113.96 and last week’s ¥113.48 low. This situation is expected to endure while the cross remains below this week’s high at ¥115.06.
The ¥115.06 level and the November peak at ¥115.52 will need to be exceeded, for the early January four-year high at ¥116.35 to be back on the plate.
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