EUR/USD falls, while GBP/USD stuck below resistance and USD/JPY pushes higher
Forex markets have seen the dollar gain in popularity, but the rise in USD/JPY might suggest that the panic over a US recession may be coming to an end.
EUR/USD in retreat as risk appetite wanes
The EUR/USD pair has finally fallen back from $1.12, having tried to hold this line for some time.
Further declines seem likely, with a rally towards $1.115 running out of steam. A failure to move back above $1.117 would signal that the bearish view is still in place, targeting the August low around $1.103.
GBP/USD still unable to break $1.21
Gains this week have run out of steam around $1.21 for GBP/USD, so if this continues to hold as resistance then a push below $1.2 seems likely.
Above $1.21, the price heads towards £1.22, key resistance in the early part of August. Looking to the longer term, a rebound towards the 50-day simple moving average (SMA) at $1.2453 is likely to be viewed as a gift for sterling bears.
USD/JPY stands apart from equity turmoil
USD/JPY has been trying to shake off the turmoil of the week so far, and it is interesting to note that while equities seem poised for further downside, this currency pair continues to hold the lows of earlier in the week and have succeeded in creating a higher low at ¥105.70.
Further gains target ¥107.00, with a break above this level signalling a bigger rebound. A move back below ¥105.50 signals that the sellers are back in charge.
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