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Dollar strength hits EUR/USD and GBP/USD while giving USD/JPY a lift

A strong US CPI reading has given the greenback new life, putting EUR/USD and GBP/USD on to the back foot while USD/JPY looks to recover recent highs.

Transcript

EUR/USD builds on break of support

EUR/USD continues to decline, with yesterday’s drop providing the break below support that reinvigorates the downtrend currently in play.

The $1.1392 level becomes the next to watch to the downside as sellers seize control. The overall view has remained firmly bearish following the rally to the 50-day simple moving average (SMA) at the end of October.

GBP/USD pushes to the downside

The GBP/USD decline has revived, heading towards the lower bound of the wide descending channel in place since late July.

Further declines will carry the price towards $1.133, where a bounce may develop if the lower channel bound continues to hold as it has in previous months.

USD/JPY heads higher

The expected USD/JPY bounce has materialised here, and now the price looks set for a resumption of the move towards ¥114.50, and higher if the uptrend is set to continue.

The bounce from ¥113.00 puts the buyers back in charge, and it would take a move back below this level to suggest a reversal is in play.


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