EUR/USD and GBP/USD recover while USD/JPY tops out amid USD depreciation
Outlook on EUR/USD, GBP/USD and USD/JPY as greenback depreciates ahead of Wednesday’s FOMC minutes and March inflation data.
EUR/USD finds support after last week’s decline
EUR/USD'S retracement lower from last week’s $1.0973 high, on the back of an appreciating greenback as the Federal Reserve (Fed) is expected to retain its tightening bias amid strong US labour market data, seems to have at least temporarily halted at Monday’s $1.0832 low with the cross swiftly heading back up again today.
The March high at $1.0929 is back in the picture, a rise above which would allow for last week’s high at $1.0973 to be revisited. Further up lurks the $1.1033 February peak.
Support below the March-to-April uptrend line at $1.085 sits between the 27 March high at $1.0801 and last week’s low at $1.0789. While the latter holds, the medium-term uptrend should remain intact.
GBP/USD is heading back up towards resistance at $1.2446 to $1.2448
GBP/USD ended its four-day losing streak at Monday’s $1.2345 low with the currency pair heading back up towards its December and January highs at $1.2448 to $1.2446 amid a weakening US dollar ahead of Wednesday’s Federal Open Market Committee (FOMC) minutes and March inflation data release.
Immediate support below Tuesday’s $1.2386 intraday low comes in along the March-to-April support line at $1.237, ahead of Monday’s $1.2345 trough. Support below this level sits at the mid-February high and early April low at $1.2275 to $1.227.
Above $1.2448 the current April high can be spotted at $1.2525, an advance above which would engage the May 2022 peak at $1.2667.
USD/JPY falters around early April high
USD/JPY’s advance from last week’s low at ¥130.64 has briefly taken it back above its early April high at ¥133.75, to ¥133.87 on Monday, before coming off again on the new Bank of Japan (BoJ) governor Kazuo Ueda’s dovish comments in his inaugural news conference. In it he said it was appropriate to maintain the central bank’s ultra-loose monetary policy for the time being as inflation has yet to fall to its 2% inflation target.
The 55-day simple moving average (SMA) at ¥132.93 is thus within reach, a slip through which could lead to the 13 March low at ¥132.29 being retested.
While the ¥133.75 to ¥133.87 resistance zone caps, we expect the March-to-April descent in the USD/JPY exchange rate to resume, confirmation of which would be a fall through the March low at ¥129.65. Minor resistance above this week’s ¥133.87 high comes in at the 15 March high at ¥135.11.
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