GBP/USD holds while USD/JPY and USD/CNH rise on stronger US dollar
Outlook on GBP/USD, USD/JPY and USD/CNH amid ongoing Israel/Gaza crisis.
GBP/USD still stabilizes after last week’s sharp sell-off
GBP/USD's rise from its early-October seven-month low at $1.2038 to last week’s $1.2337 high was followed by a swift decline to $1.2123 as the Israel/Gaza crisis led to flight-to-safety flows into the US dollar.
So far this week the cross managed to stabilize above the $1.2123 low as UK wage growth came in lower-than-expected, at the lowest level in three months.
A fall through Friday’s low at $1.2123 and the next lower $1.2106 previous Friday low remains a possibility, though. If so, it could provoke a slide to the early-October low at $1.2038 and the psychological $1.20 mark. While Friday’s low at $1.2123 holds, however, Friday’s high at $1.2225 may be revisited. Further up lies the late-September high at $1.2271.
USD/JPY gravitates towards the ¥150.00 mark
Despite the increased risk of Bank of Japan (BoJ) currency intervention as USD/JPY approaches the psychological ¥150.00 mark, the cross continues to drift higher towards it. Above it lies the early-October high at ¥150.16.
Support can be spotted along the July-to-October tentative uptrend line at ¥149.18.
While the next lower 10 October low at ¥148.17 underpins, the uptrend remains intact.
USD/CNH continues to creep higher
Recent concerns regarding deflation in China and flight-to-quality flows into the US dollar on heightened Middle East tensions helped USD/CNH rise towards its CN¥7.3316 early-October high.
A rise above the CN¥7.3316 level would mean that the cross is leaving its mid-September-to-October sideways trading range with the August and September highs at CN¥7.3497 to CN¥7.3681 then being in focus.
Minor support sits at last Tuesday’s CN¥7.3013 high and more significant support further down between the 55-day simple moving average (SMA), the July-to-October uptrend line and the late-September low at CN¥7.2904 to CN¥7.2811.
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