EUR/USD and GBP/USD edge back as USD/JPY rebounds for now
Some dollar strength has lifted USD/JPY while pushing EUR/USD and GBP/USD back down.
EUR/USD recovery falters
EUR/USD's push higher has suffered a modest reverse, dropping back below the 50-day simple moving average (SMA) of $1.1803 after moving above it at the end of last week.
However, the broader rally from the lows is still intact, so we look for a recovery from an intraday higher low that will carry the price back towards Friday’s highs and then target $1.19. A bigger reversal below $1.17 would begin to suggest that a new downward move is in play.
GBP/USD steadies after strong rally
GBP/USD moved steadily higher last week and into Monday’s session, but is seeing some short-term weakness today.
However, dips over recent sessions have been buying opportunities so we look to see if today’s weakness goes the same way. Further gains target $1.32 and higher, and it will require a drop below $1.293 to breach rising trendline support from the September low.
USD/JPY edges up after losses
For the USD/JPY pair, we will see if the dollar bulls can re-establish some control after two sharp down days.
Having dropped below the 50-day SMA (¥105.78) and seen daily stochastics roll over, it will be interesting to see if the pair creates an intraday lower high and then continues to fall, perhaps testing ¥105.00 and lower.
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