EUR/USD and GBP/USD rally, while USD/JPY stalls ahead of FOMC meeting
As markets await the Fed meeting, we have seen further gains for EUR/USD and GBP/USD, while USD/JPY has struggled to move higher.
EUR/USD hits one month high
EUR/USD has enjoyed a rally over the past four sessions, supported by a bounce off the 100-day simple moving average (SMA) and a rising daily moving average convergence/divergence (MACD).
It has now succeeded in pushing back above the 50-day SMA, and this takes it back to the early February highs around $1.08. From here the price targets the February high just above $1.10.
The recovery from the support zone around $1.055 revives the bullish view, and it would need a move back below $1.05 to suggest that the sellers are in control once again.
GBP/USD climbs after CPI data
The UK consumer price index (CPI) reading gave the pound a boost against the dollar, in GBP/USD after some weakness on Tuesday.
The price has rallied sharply since the beginning of the month, when it hit a low of $1.08. Since then, the surge has carried the price back above the 100- and 50-day SMAs. Now the price targets $1.24, the highs from December and January. From here the May 2022 high at $1.266 comes into view.
Bulls appear to be firmly in charge, and it would need a move back below $1.20 to alter this view. The Federal Reserve (Fed) and Bank of England (BoE) meetings take place over the next 30 hours, so there, a heightened risk of volatility for this pair.
USD/JPY stalls below 50-day MA
Dollar weakness has driven USD/JPY back below the 50-day SMA, but some strength has been seen ahead of tonight’s Fed decision.
Trendline resistance from the March high could see the price falter around ¥133.00, but a move above this level would likely need a more hawkish Fed.
A reversal below ¥132.00 would open the way to another test of the lows of this week, and then on to the January lows around ¥127.00.
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