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EUR/USD, EUR/GBP consolidate post FED and BoE rate hikes, USD/JPY in six-year highs on BoJ’s dovish stance

EUR/USD and EUR/GBP capped in wake of US and UK central bank rate hikes, while USD/JPY trades in six-year highs as BoJ keeps rates unchanged despite near three-year high inflation.

EUR/USD capped by resistance as week ends

EUR/USD’s close to 2% rally since last week has been put on hold by its two-month downtrend line as Russia appears to have paid a $117 million bond interest payment in US Dollars, indicating it could have avoided its first external bond default in a century. Traders also assessed the US Federal Reserve’s (FED) fed funds rate hike by a quarter point, the first since 2018, and the ongoing war in Ukraine.

A rise above yesterday’s high at $1.1137 is needed, for the 55-day simple moving average (SMA) at $1.1248 to be reached next.

Slips should find support around the minor psychological $1.100 mark, with further support seen at last Monday’s $1.0901 low.

EUR/GBP consolidates post BoE rate decision

EUR/GBP continues to range trade between the 200-day SMA and February peak at £0.8478 on the one hand and the 55-day SMA and March 11 low at £0.8361 on the other. This remains the case despite yesterday’s Bank of England (BoE) rake hike to 0.75% as it forecast inflation hitting 8% in April, with worse to come as Ukraine’s war drives up energy prices.

While the 11 March £0.8361 low continues to hold, the bulls remain in control, with a rise above the recent £0.8478 high engaging the 20 December high at £0.8554.

USD/JPY trades in 6-year highs

USD/JPY trades in six-year highs as the Bank of Japan (BoJ) left its key short-term interest rate unchanged at -0.1% and that for the 10-year bond yields around 0% despite inflation jumping to a near three-year high.

Last week’s break out of its 2022 ascending triangle puts the psychological ¥120.00 region on the map.

Minor support is seen around the December 2016 peak at ¥118.66 and major support at previous key resistance, namely the ¥116.34 January and February highs which, because of inverse polarity, should now act as support.

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