EUR/USD and GBP/USD push higher while USD/JPY stabilizes
EUR/USD is encountering resistance in its push higher, while GBP/USD is heading back towards the top of its current range.
EUR/USD looks to break higher
As expected EUR/USD found support at the rising trendline from the 14 November low, but the $1.108 has acted as resistance so far this week – a move above this level is required to create a higher high and maintain the upward momentum seen over the past week.
This possible ascending triangle formation would suggest a bullish breakout is at hand, but this view would be negated with a move back below trendline support, ie below $1.1065. On the daily chart a failure to move above the 100-day simple moving average (SMA) of $1.1089 risks a revival of bearish momentum and a push back to the October low around $1.09.
GBP/USD pushing higher within range
In an eerie similarity to late October, GBP/USD has continued to push higher towards $1.2976, yesterday seeing a bounce off rising trendline support from the 8 November low.
However, overnight gains are faltering below $1.093, risking another test of support. Further gains re-target $1.2976, while a move below $1.29 would suggest a break of trendline support, and then targets $1.282 or down to the bottom of the current trading range around $1.277.
USD/JPY looks to hold 50-day SMA
USD/JPY has stabilized at the 50-day SMA (¥108.56) for the time being, leading to hopes that a higher low may still be created, even after it dropped below rising trendline support earlier in the week.
An attempted rally yesterday ran out of momentum but if the price can continue to hold the 14 November low around ¥108.30 then a rebound may develop. Lower intraday highs so far this week present a challenge, but a move above ¥108.80 would be a good first step in reviving a more bullish view. Below ¥108.30, the price heads towards ¥107.90 and the low from 31 October.
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