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EUR/USD, EUR/GBP trade in multi-year lows while USD/JPY stays side-lined

EUR/USD, EUR/GBP trade in multi-year lows below key resistance with USD/JPY continuing to range trade amid increasing inflationary worries on the back of sharply rising energy and agricultural commodity prices.

EUR/USD slips to 23-month low amid intense shelling in Ukraine

EUR/USD has fallen through the September 2019 low at $1.0879 and so far dropped to $1.0822 before trying to recover some of its recent sharp losses amid heavy shelling in Ukraine and increased worries of an inflationary spiral building. Resistance comes in between the November 2019 low at $1.1003 and the April 2020 low at $1.1019.

Failure at $1.0822 would engage the February and May 2020 troughs at $107.78 to $107.67. Further down the April 2020 low can be seen at $107.27 and the March 2020 low at $106.38. Strong resistance is found between the May 2019, January and February lows at $1.1106 to $1.1122.

EUR/GBP fell through key support as fighting in Ukraine intensifies

Last week EUR/GBP fell through its major £0.8305 to £0.8277 support area, which has held since December 2016, as the Russian invasion of Ukraine entered its second week and over a million refugees fled the country. This region should act as strong resistance in the course of this week.

With the 200-month moving average at £0.8199 having practically been hit, the cross is likely to at least short-term stabilise, however. If not, the April 2016 high at £0.8118 would be next in line, together with the June 2010 low at £0.8068.

USD/JPY stays side-lined despite acting as a safe-haven currencies

With the US dollar index trading in 22-month highs as investors pile into the greenback amid the intensifying war in Ukraine and worries about inflationary pressures mounting on the back of sharply rising energy prices, the USD/JPY currency battle continues.

Last week the late January, late February and current March highs at ¥115.68 to ¥115.80 capped the currency pair with it slipping back to its September-to-March uptrend line which held at ¥114.66.

The cross currently trades around the 55-day simple moving average (SMA) at ¥114.98 while being side-lined above the ¥114.41 late-February low. Only failure there would engage the ¥114.16 early-February low whereas only a rise above last week’s ¥115.80 high would push the January and February highs at ¥116.33 to ¥116.35 to the fore.

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