Euro, sterling and yen weaken against the dollar on debt ceiling talk hopes
Hopes of progress in US debt ceiling talks have given a boost to the greenback and put EUR/USD and GBP/USD on the back foot while listing USD/JPY.
EUR/USD sellers in control
Losses continue here with EUR/USD, with the price action yesterday marking a drop below the lows of last week and opening the way to additional downside. Brief intraday rallies such as we saw on Friday and Monday are continuing to be selling opportunities, and the broader view continues to point towards a push towards $1.14.
Trendline resistance from the September high continues to cap any upside for now, with a move above $1.165 needed to break this line.
GBP/USD edges back from highs
Gains here have stalled for now with GBP/USD, as the price drops back from the highs of the week. Given overall USD strength this move will be watched carefully to see if it denotes a revival of GBP/USD weakness and brings a move back towards $1.34 into view, with a renewed fall below yesterday’s lows and $1.355 providing further confirmation of the bearish case.
Bulls will hope this weakness is temporary and that a move above $1.365 can take place, cancelling out the lower high scenario for now.
USD/JPY holds support
The bounce seems set to resume with USD/JPY, although the mixed day yesterday shows there is still some selling pressure to hand.
However, the textbook bounce from support at ¥111.00 does suggest a renewal of the move higher, and the bullish view remains in play unless we see a reversal back below Tuesday’s lows.
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