EUR/USD rallies, as GBP/USD pushes above recent highs and USD/JPY bounce stalls

The dollar’s recent strength is fading, and as a result EUR/USD and GBP/USD are picking up, while the surge in USD/JPY is fading.

EUR/USD rebounds from 100-day SMA

EUR/USD has finally found the strength to move higher, after reaching the 100-day simple moving average (SMA) at $1.1966 last week.

In early trading today it has managed to push on above trendline resistance from the January peak, and combined with another bullish stochastic crossover, it looks like a broader move higher is underway, targeting $1.22 and then on to $1.235. The longer-term uptrend has reasserted itself, so a move back below the 100-day SMA is needed to reverse the outlook.

GBP/USD clears recent highs

GBP/USD has already seen a breakout to new highs, as its current uptrend reasserts itself after the brief drop last week.

The rebound back above $1.36 last week, and the further gains seen since them, put the buyers firmly back in control, negating the bearish view forming with Thursday’s drop towards the rising 50-day SMA.

USD/JPY falls below ¥105

There will be questions over whether the bounce of USD/JPY from the January low has now run its course, after the reversal at the 200-day SMA (¥105.59).

Of course, the uptrend from the beginning of the year is intact, and even a decline towards ¥104.00 would still create a higher low, although a drop below the mid-January high around ¥104.40 would begin to raise questions about a revival of the longer-term move lower. A rebound back above ¥105.00 and then above ¥105.50 would mark a more bullish development.

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