EUR/USD could move to 200-day SMA
Most people will have been glad to see the back of January where EUR/USD is concerned.
So far the price continues to bounce between $1.08 and then $1.0950, with the strong recovery of the past two days suggesting that this rangebound trading will continue.
Any break higher needs to clear $1.0950, and also move above the long-term downtrend line. This would then allow the bulls to contemplate a move towards $1.10 and possibly on towards the 200-day simple moving average at $1.1053.
A failure at the downtrend line would suggest the sellers are in control again, which would take us back towards $1.0840 and then $1.0790.
USD/JPY could target ¥123
If the pair doesn’t get back above ¥121 soon, then it looks like the bounce has run its course.
A sustained move towards ¥120 would indicate that a new leg lower is in progress, with targets down towards ¥119.08 and then ¥118.
Any move back through ¥121 would then target ¥122 and ¥123.
AUD/USD could head lower
AUD/USD’s rally has stalled around $0.71, with bounces above here unable to gain traction. With indices and oil in retreat, it would not be surprising to see this pair head lower too.
A move below $0.7040 would target $0.7010 and $0.6980. It would take a firm close above $0.7140 to reignite the upward move.