Dollar surge boosts USD/JPY and USD/CAD, while higher UK inflation pushes EUR/GBP into reverse
The dollar continues to make headway as expectations of Fed easing are reined in, while EUR/GBP has gone into reverse following UK inflation data this morning.
USD/JPY at six-week high
USD/JPY continued to rebound, and has now reached the 100-day simple moving average (SMA) once again.
The rebound has carried it back above the 50-day SMA, and to a level not seen since early December, after which it continued to decline. Now the price is firmly on the up, and a close above ¥147.30 would mark a fresh bullish development and open the way to the highs of November.
A reversal back below the ¥145.00 level would mark a fresh bearish development.
EUR/GBP barrels lower after UK inflation data
After signs of stabilisation earlier in the week, the higher UK inflation figure has put the pressure on EUR/GBP once again.
Expectations are now rising that the Bank of England (BoE) will have to hold off on rate cuts for longer than expected, and so this is strengthening sterling against the euro. A move towards the December lows looks likely, and below this the price will push on towards the lows of August around £0.852.
A recovery above £0.86 is needed to halt this bearish view and revive hopes of a rebound.
USD/CAD keeps on climbing
Like USD/JPY, USD/CAD continues to demonstrate plenty of strength. The price has rallied sharply since late December, though it is still at risk of a lower high should a reversal occur.
Additional gains target the C$1.36 highs from early December, where an attempted rebound faltered.
A close back below C$1.345 would mark a bearish development.
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