EUR/USD, GBP/USD and USD/JPY slide on stronger greenback and falling Japanese inflation
Outlook on EUR/USD, GBP/USD and USD/JPY amid a stronger greenback and solid Japan data.
EUR/USD continues to be side-lined
EUR/USD's retracement lower from its 13-month high at $1.1075, due to a strengthening US dollar (USD) amid a US “rates higher for longer” scenario, has so far taken it to this week’s low at $1.091, above which it has been range trading since the beginning of the week.
A slip through Monday’s $1.091 low would eye the $1.0832 to $1.0804 mid-February and 10 April lows which are likely to act as significant support.
Minor resistance above Wednesday and Thursday’s $1.0984 to $1.0989 highs sits along the minor psychological $1.10 mark with further resistance found at the $1.1033 February peak. Still further up lies last week’s peak at $1.1075, ahead of the January 2022 low and early-March 2022 high at $1.1121 to $1.1122.
GBP/USD is likely to further come off its ten-month high
GBP/USD’s climb down from its ten-month $1.2546 high, made marginally above the early-April high at $1.2525, amid a stronger greenback, has so far taken it to this week’s low at $1.2354 which is once again being eyed.
Were this level and the next lower 10 April low at $1.2345 to be fallen through, a significant top would likely be formed with the mid-February high and early-April low at $1.2275 to $1.227 being targeted.
As long as the $1.2354 to $1.2345 area holds, though, the medium-term uptrend remains intact. Minor resistance now comes in at Wednesday’s $1.2474 high above which lies more significant resistance between $1.2525 to $1.2546. These levels would need to be exceeded for the next higher May 2022 peak at $1.2667 to be back in the frame.
USD/JPY gives back some of its recent gains
USD/JPY’s rise from its early-April low at ¥130.64 has taken the currency pair to this week’s high at ¥135.13 before stalling and sliding back towards the 55-day simple moving average (SMA) at ¥133.53 as the Japanese inflation rate edges down to a six-month low.
The annual inflation rate slid to 3.2% in March compared to its 3.3% reading in February and helped the Japanese Yen (JPY) recover, together with Japan manufacturing purchasing managers’ index (PMI) which rose to a six-month high.
Below the 55-day SMA there is no support to speak of until the mid-April low at ¥132.03. Good resistance can be seen between the 15 March and this week’s highs at ¥135.11 to ¥135.13.
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