Post-FOMC moves spark volatility in EUR/USD, GBP/USD and USD/JPY
Initial USD weakness in the wake of the Fed meeting has given way to a recovery for the greenback, prompting price gyrations in key FX pairs.
EUR/USD stuck below $1.20
A close above $1.20 still eludes the EUR/USD pair, which is struggling to make headway despite the rally from last week’s lows. A more bullish view requires a break above this level, opening the path to trendline resistance from the January high, likely around $1.21.
With rising stochastics and a potential bullish moving average convergence divergence (MACD) crossover the longer-term uptrend may well have been revived, with a more bearish view requiring a reversal back below $1.19 at the least.
GBP/USD recovering in wake of FOMC
The past two sessions have seen a strong recovery that has arguably revived the uptrend. The 50-day simple moving average (SMA) at ($1.3813) remains untested once again, but with a higher low now in play a move back towards $1.42 and the latest higher high seems likely.
Sellers were unable to drive the price below $1.38, leaving the buyers to dictate the move, and with a weakening of the US dollar in the wake of the Federal Open Market Committee (FOMC) meeting the way seems clear for further upside.
USD/JPY fights to hold gains
The USD/JPY pair continues to grudgingly give back some of its gains, but we have seen four days where the price has ended well off the highs but firmly above the lows, a sign of how closely-fought these moves have been.
The trend change from earlier in the year remains intact, so even a bigger drop towards ¥107 would not necessarily change the overall outlook, but it might be time for USD/JPY to finally see a move to the downside after the huge gains of January and February.
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