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EUR/USD edges down as USD/JPY holds firm after yesterday’s drop

Monday’s volatility was short-lived, with both EUR/USD and USD/JPY stabilizing in early trading.

EUR/USD edges down after Monday’s volatility

The EUR/USD rally suffered its most severe knock in weeks yesterday, falling sharply but then rebounding in thin pre-Christmas trade.

The price remains within the November uptrend, yesterday’s low having approached, but not tested, rising support. A move below $1.21 would break this support, and potentially bring the 50-day simple moving average (SMA) at $1.1921 into view.

USD/JPY stabilises after yesterday’s drop

Just as EUR/USD went up from the lows, USD/JPY fell back yesterday after attempting to rally during the early part of the session.

Last week saw it create a new lower low, moving below ¥103 for the first time since March. The long-term downtrend continues to hold sway, and rallies towards the 50-day SMA have proven to be useful indications of impending lower highs. With the price now stretched away from the 50-day SMA, the chance of a snap-back rally cannot be discounted.

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