EUR/USD and EUR/GBP mixed while USD/JPY tries to stabilise after sharp drop
EUR/USD and EUR/GBP range trade while USD/JPY tries to hold above last week’s low following the BOJ’s decision to hold rates steady.
EUR/USD holds above parity ahead of Wednesday’s FOMC meeting
EUR/USD continues to oscillate around the $1.02 mark as traders await the Federal Reserve’s (Fed) Federal Open Market Committee (FOMC) meeting on Wednesday which is to shed more light on its tightening path.
Support can be spotted between the mid-August high and Friday’s low at $1.013 to $1.0122 and resistance at last week’s $1.0278 high. Much more significant resistance can be found in the $1.034 to $1.036 zone which consists of the December 2016 and January 2017 as well as the May and June 2022 lows.
Were a renewed descent to take the cross below $1.0122, parity would be back in play. Below it the current July trough sits at $0.9952. Failure there would engage the $0.9698 to $0.9593 support area which is comprised of the June 2000 and February 2001 highs and the September 2002 low.
EUR/GBP continues to trade in the £0.85 region
EUR/GBP trades back around the £0.85 level, having last week briefly shot up to £0.8584 before coming off again on UK Gfk consumer confidence and retail sales data.
Slips may find support around the £0.8486 early June and Friday’s lows. Minor resistance above the 55-day simple moving average (SMA) at £0.8535 is seen at the 20 July high at £0.8513 with further sitting between the 24 and 30 June lows at £0.8551 to £0.8561. Further up sit the late May and early June highs as well as last week’s high at £0.8584 to £0.8592.
Below Friday’s low at £0.8486 meanders the 200-day SMA at £0.8444 which is likely to act as support, if retested.
USD/JPY trades in two-week lows
Last week USD/JPY tried to rise back towards its 24-year early July high at ¥139.39 but ran out of steam at ¥138.87 as the Bank of Japan (BOJ) stuck to its guns and left interest rates unchanged despite Japan's inflation staying above the BOJ's target for the third straight month.
The cross then slipped all the way back to ¥135.57 on Friday, a two-week low, above which it is hovering on Monday. Good support below it can be found between the 23 June and early July lows at ¥134.96 to ¥134.30.
Short-term bounces may encounter resistance at the June peak at ¥137, above which the 11 July high and 19 July low can be spotted at ¥137.39 to ¥137.75.
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