Dollar weakness drives up EUR/USD and GBP/USD, while hitting USD/JPY
Changed expectations around the Fed’s next move have prompted the dollar to go sharply into reverse.
EUR/USD stages a recovery
After bottoming out last week EUR/USD has pushed higher, and with the daily moving average convergence/divergence (MACD) turning positive a new higher low could be created.
This would then revive the bullish case following the pullback from the February high around $1.10, and suggest another move back to this level and then potentially higher. This reinforces the uptrend and leaves the bearish view behind for now.
Sellers will need to drive the price back below $1.05, and below the 100-day simple moving average (SMA), to suggest that another push lower is developing.
GBP/USD surges on USD weakness
The past four sessions have seen a potential change in mood for the GBP/USD, as it rebounds back above the 50-day SMA.
After dropping below the 200-day SMA last week, the price has recovered, moving back above the 200-day, followed by the 100- and 50-day SMAs. This has been accompanied by a bullish MACD crossover that could prompt further upside, targeting $1.22 and then the January highs at $1.243.
As with EUR/USD, last week’s lows must be taken out to the downside to cancel out the growing bullish view.
USD/JPY heads back to the 50-day MA
Changing expectations around the Federal Reserve (Fed) policy have driven a reversal for the USD/JPY.
After reaching, and briefly breaching, the 200-day SMA, the pair has fallen sharply, and with a bearish MACD crossover and a lower high in place traders seem to be on the lookout for more losses. Below the 50-day SMA the next target would be the January lows around ¥127.80.
A potential recovery would need a move back above ¥135.00 to then allow for another test of ¥135.00.
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