EUR/USD extends gains while USD/JPY and EUR/GBP consolidate
Outlook on EUR/USD, USD/JPY and EUR/GBP amid Eurozone retail sales.
EUR/USD extends despite strong NFP data
EUR/USD continues its advance despite Friday’s stronger-than-expected US Non-Farm Payroll (NFP) data which came in at 263k newly created jobs versus an expected 200k which only briefly led to retracement to $1.0429 on Friday before the cross resumed its ascent.
Key resistance between the 38.2% Fibonacci retracement of the 2021 to 2022 bear market, the 55-week simple moving average (SMA), the late June 2022 high and the March 2020 pandemic low between $1.0608 to $1.0638 is thus still being targeted but may soon cap.
The currency pair is supported by the $1.05 to $1.0482 region, which consists of minor psychological support and the November highs, as well as Friday’s $1.0429 low. More significant support can be spotted between the November-to-December uptrend line and the 200-day SMA at $1.038 to $1.0365.
EUR/GBP remains under pressure ahead of European retail sales
EUR/GBP weighs on its mid- to late October lows at £0.858 to £0.8572 amid Eurozone retail sales data for October with last week’s low and the 200-day SMA at £0.8548 to £0.8541 about to be reached.
This area may offer support on Monday but if it were to give way during the week, the mid-August high at £0.8512 would be in sight.
Minor resistance can be found along the two-month downtrend line at £0.862 and further up at last week’s highs at £0.8661 to £0.8675. While these cap, the November-to-December downtrend remains valid.
USD/JPY flirts with 200-day SMA
USD/JPY continued its descent for a second week in a row amid a weaker greenback following the US Federal Reserve (Fed) Chair Jerome Powell’s comments last week regarding a slower pace of rate hikes being envisaged to combat persistently high inflation.
With the currency pair having now reached its 200-day SMA at ¥134.62, short-term stabilisation is expected to be witnessed. Therefore, while Friday’s low at ¥133.63 underpins, a recovery bounce back towards the ¥135.85 early August high may ensue.
More significant resistance sits further up at the ¥137.68 mid-November low. While the cross remains below last week’s ¥139.89 high, the October-to-December downtrend remains intact.
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