EUR/USD and GBP/USD rally as USD/JPY bounce hits resistance

EUR/USD and GBP/USD continue to enjoy a bounce, while the USD/JPY rally is reaching a critical point.

Transcript

EUR/USD edges up

The EUR/USD pair continues its recovery from the lows of late September, returning to the 50-day simple moving average (SMA) of $1.18.

It has now run back into trendline resistance from the early September high – a reversal below $1.1742, the high from Friday’s session, would suggest a new lower high had been created. Further gains target $1.19 and then $1.195.

GBP/USD back to mid-September highs

The rebound here from the 200-day SMA in late September has carried the GBP/USD pair back to the $1.30 level of mid-September.

Further gains target $1.3039, the 50-day SMA, and a crucial area of horizontal resistance. Above this, $1.32 comes into view. A reversal below $1.29 could signal that another move back towards $1.27 is in the offing.

USD/JPY clings to 50-day SMA

A recovery from the September lows has seen the price of USD/JPY move back to the 50-day SMA at ¥105.76.

Further gains from here would mark a potential change of outlook, given the downtrend that has been in place since late June, and could bring ¥106.40 into view. If the ongoing downtrend prevails then we look for a bearish crossover of stochastics or moving average convergence divergence (MACD) that will signal a possible lower high and see the pair head back towards ¥105.00 and potentially lower.

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