EUR/USD calm ahead of ECB, as GBP/USD rebounds slightly and USD/JPY ticks down

The ECB meeting could well provoke some EUR/USD volatility, while GBP/USD continues to watch Brexit developments with some concern.

EUR/USD steady ahead of ECB

As might be expected, the EUR/USD pair has not moved much higher this week, with bulls clearly unwilling to drive it higher in advance of a European Central Bank (ECB) meeting that may see at least some comment on the strength of the euro.

Losses since early August have been stifled just above $1.17, so a break below here would be regarded as a bearish development. Should the meeting not strike a particularly dovish tone then we can expect the pair to make tentative moves in the direction of $1.20, the high from the beginning of the month.

GBP/USD edges up after sharp losses

Despite a small bounce from yesterday’s lows, the GBP/USD pair continues in the downward move from the September peak, as Brexit tensions rise. A resumption of the downward move that takes out $1.29 would clear the way for a move towards $1.277 and $1.25 over the near term.

A recovery above $1.304, previous support, is probably contingent on some improvement in the current UK/EU impasse, but would signal that the uptrend of recent months has resumed.

USD/JPY trades in a narrowing pattern

The USD/JPY pair continues to see a smaller range, as it faces the choice between breaking above trendline resistance with a move above ¥106.50, or below trendline support if it takes out ¥105.60.

The impressive recovery from the August lows has come under threat as bullish momentum has drained away, with the longer-term downtrend reasserting itself.

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