EUR/USD and GBP/USD try to recover their poise while USD/JPY returns to July high
A rallying US dollar knocked back the euro and sterling yesterday, while USD/JPY has now recouped all its July losses.
EUR/USD attempts to move higher after Thursday’s failed rally
Yesterday’s EUR/USD price action appeared to suggest a higher low was solidly in place and that a move higher had begun.
However, the price dropped back in the wake of US consumer price index (CPI), and gave back almost all its gains. It has edged higher in early trading today, helping to preserve some hope of a higher low, but a move above $1.10 is still the catalyst needed for this move.
So long as the price holds above $1.09 then a bullish view still prevails overall, but a loss of $1.09 signals a move in the direction of the still-rising 200-day simple moving average (SMA).
GBP/USD in full reverse
For the GBP/USD yesterday’s price action was even more damaging to the bullish case. After heading back to $1.28 the price reversed course and moved to a one-week low.
Buyers will need a move back above the 50-day SMA to help suggest that a low is being formed. This might then allow a move towards $1.30 and higher.
Losses last week after the Bank of England (BoE) decision saw the price head towards $1.26, but then it rebounded. Bulls will be hoping that $1.26 can hold again, while the 100-day SMA also offers the potential for support. A close below $1.26 amplifies the short-term bearish view.
USD/JPY back to July highs
The CPI figures yesterday drove USD/JPY to its highest level since early July, and the pair has now recovered all the losses suffered since that high.
A close above ¥144.94 would see the price breakout to a new high, and this might then allow it to target, in the medium-term, the October 2022 highs at ¥151.94.
Short-term weakness may develop with a reversal back below ¥143.50, which could then see the price head back to the rising 50-day SMA.
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