EUR/USD and GBP/USD pause their ascents while USD/JPY continues to rise
Outlook on EUR/USD, GBP/USD and USD/JPY as the greenback appreciates on news that the US mid-size banking sector will soon be more tightly regulated.
EUR/USD’s advance stalls below current March high at $1.0929
EUR/USD’s rise from last week’s $1.0714 low faltered slightly below the current March high at $1.0929 as final German consumer price index (CPI) data slightly overshot expectations while Spanish inflation came in much lower than anticipated.
EUR/USD is likely to find support along the two-week uptrend line at $1.0855, ahead of the $1.0804 to $1.0801 mid-February and Monday’s highs. While the latter level holds, overall upside pressure should be maintained with a rise towards the $1.1033 February peak remaining on the cards.
For now, resistance at last and this week’s highs at $1.0926 to $1.0929 caps, though. Minor support below Monday’s $1.0801 high can be seen at the mid-March high at $1.076, ahead of the 55-day simple moving average (SMA) at $1.0742.
GBP/USD runs out of steam below key resistance at $1.2446 to $1.2448
GBP/USD has nearly reached its December and January highs at $1.2446 to $1.2448 as the UK narrowly avoids a recession with its final quarter four (Q4) gross domestic product (GDP) coming in stronger than expected at 0.1%.
A minor retracement back towards last week’s high at $1.2343 and perhaps the one-month steep uptrend line at $1.2325 may ensue while the $1.2446 to $1.2448 resistance zone caps.
Provide that no bearish reversal takes the currency pair to below Thursday’s low at $1.2294 on a daily chart closing basis, the recent uptrend remains intact. A rise above the December and January highs at $1.2446 to $1.2448 could lead to the May 2022 peak at $1.2667 being back on the map.
USD/JPY recovery slows down but still remains in play
USD/JPY’s recovery from last week’s ¥129.65 low amid an appreciating US dollar as the US government asked the country’s financial regulator to tighten up recently relaxed legislation in regards to mid-sized banks and undertake more rigorous stress testing, has taken it to above the 55-day SMA at ¥132.53.
The next potential upside target can be spotted at the 24 February low at ¥134.06 with only a rise above the next higher ¥135.11 mid-March high meaning that the 2023 uptrend has indeed resumed.
Unless such an advance occurs, the odds favour another down leg being made which could take the cross to below its 10 February and March lows at ¥129.81 to ¥129.65. Support below the 55-day SMA at ¥132.54 can be found at the 27 March high at ¥131.77.
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