USD/JPY comes off near 24-year highs while EUR/USD and EUR/GBP capped
USD/JPY looks short-term toppish while EUR/USD and EUR/GBP flirt with resistance
EUR/USD trades close to resistance
EUR/USD gradual rise from its current June low at $1.036 has once more run out of steam below the 55-day simple moving average (SMA) at $1.0633 despite the Federal Reserve (Fed) Chair Jerome Powell mentioning the possibility of a recession in the US in his testimony to Congress on Wednesday.
Wednesday’s intraday high at $1.0605 was only marginally made above the $1.0601 mid-June high but as long as Wednesday’s low at $1.047 underpins, another attempt to break through the minor $1.0601 to $1.0633 resistance zone is likely to ensue. If so, the four-month downtrend line at $1.069 would be in focus.
Potential slips below Wednesday’s low at $1.047 would engage the 17 June low at $1.0445. Below it major support remains to be seen at the $1.036 to $1.035 May and current June lows. Failure at $1.035 could lead to a slide towards parity taking place.
EUR/GBP continues its gradual advance
EUR/GBP is trying to overcome its £0.8618 May high as the UK is experiencing 40-year high inflation at 9.1% Year-on-Year (YoY), the country’s largest rail strike in 30-years and is plagued by recession fears.
Should a daily chart close above £0.8618 unfold, a continued gradual rise may take the cross all the way to its one-year high at £0.8721, made marginally below the 200-week SMA at £0.8723.
Slips should find support between the late May and early June highs at £0.8592 to £0.8587 with further minor support coming in at the 21 June low at £0.8569. Only currently unexpected failure at £0.8569 would lead to the three-month uptrend line at £0.8543 being back in play.
USD/JPY comes off near 24-year highs
USD/JPY is seen coming off its ¥136.71 near 24-year high as the US dollar is taking a breather amid comments from Fed Chair Jerome Powell evoking the possibility of a US recession in his testimony before Congress on Wednesday and as the Japanese yen is benefitting from weaker oil prices, given that Japan is a big net importer of the commodity.
The technical picture is also interesting in that negative divergence can be spotted on the daily 9-period Relative Strength Index (RSI) which made a lower low and thus did not confirm the higher high seen on the daily USD/JPY chart. Such divergence in most instances leads to at least a short-term countertrend move with the cross expected to slip back towards its one-month support line at ¥133.25.
While the mid-June low at ¥131.50 holds, however, the medium-term uptrend remains intact. A rise and daily chart close above this week’s multi-decade high at ¥136.71 would engage the minor psychological ¥140.0 barrier and then the June 1991 peak at ¥142.80.
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