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EUR/USD, GBP/USD and USD/JPY on the rise, but questions remain

EUR/USD, GBP/USD and USD/JPY regain lost ground, but questions remain over a potential move lower.

​EUR/USD rebound likely to be sold soon enough

EUR/USD has been on the front-foot over the course of the past two-days, with risk sentiment seemingly taking a more positive turn as we head towards the weekend. Today looks to provide plenty of volatility for this pair, with the eurozone consumer price index (CPI) and US core personal consumption expenditures (PCE) price index bringing the focus back onto the inflation outlook.

Forecasts point towards a eurozone CPI figure of 9.7%, core CPI of 4.5%, and US core PCE up to 6.3%. The wider bearish trend evident over the course of the year does signal a high likeliness that this current rise is simply another push back towards trendline resistance. Whether we reach it or not remains to be seen.

However, in either case it looks unlikely that we will break through the $1.005 swing-high. As such, bearish positions are favoured unless the price rises through trendline and $1.005 swing-high resistance.

GBP/USD rallies into Fibonacci resistance

GBP/USD has enjoyed a notable period of upside after Monday’s volatile low, with sentiment appearing to take a turn for the better ever since. Crucially, we have essentially seen all the downside experienced since the government’s mini-budget regained despite substantial losses evident throughout stock-markets.

This morning has seen UK gross domestic product (GDP) decline less than expected, with the final quarter two (Q2) figure of 0.2% seeing a recession avoided. Despite all this, it looks likely that we will soon see the bears come back into play, with the 61.8% Fibonacci resistance level ($1.1199) bringing a key potential reversal point.

Whether it happens here or a little higher, it does seem likely that the bearish trend will soon kick in once again. That view holds unless the price rises through the $1.1738 swing-high.

USD/JPY rally slows at key resistance

USD/JPY has been attempting to regain ground since last weeks Bank of Japan (BoJ) led sell-off. Their decision to intervene in the markets in a bid to prop up the Yen does raise questions over whether we could see something similar occur in the near future.

Nonetheless, we have seen the price gradually rise since, with the ¥144.99 level coming into play as a notable resistance level. Given the consolidation below that level, a break below ¥143.90 would bring the potential for a consolidation phase.

However, with a wider bullish trend in play, there is a good chance we simply break higher and continue to gain ground. A rise through ¥144.99 and ¥145.90 would certainly provide us with a greater degree of confidence that such a move will take place.


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