EUR/USD trades in 15-month highs, USD/JPY in six-week lows while EUR/GBP stabilises
Outlook on EUR/USD, EUR/GBP and USD/JPY post softening U.S. inflation data.
EUR/USD nears its March 2022 peak
EUR/USD swiftly extended its gains and rose for a fifth consecutive day, propelled higher by softer-than-expected U.S. inflation.
With consumer price inflation (CPI) for June coming in at 3% Year-on-Year (YoY) and core at 4.8% YoY Federal Reserve (Fed) rate hike expectations have greatly diminished, provoking a U.S. dollar sell-off which benefited the euro.
EUR/USD is approaching its March 2022 peak at $1.1185, now that it has risen above its $1.1095 April high which, because of inverse polarity, should now act as minor support.
EUR/GBP bounces off its 11-month low
EUR/GBP recovered from its £0.8504 current July low, last traded in August 2022, and did so as the British economy contracted by 0.1% Month-on-Month (MoM) in May, following 0.2% growth in April but compared to an anticipated bigger decline of 0.3%.
EUR/GBP thus has Monday’s high at £0.8584 in its sights, above which the April-to-July downtrend line can be seen at £0.8604. This may well cap again, though.
Minor support can be found around the 23 June low at £0.8536.
USD/JPY drops more than 4% over five consecutive days
This week’s ongoing U.S. dollar weakness accelerated on the back of a softer U.S. inflation print on Wednesday with USD/JPY slipping through its 55-day simple moving average (SMA) and its March-to-July uptrend line at ¥139.64 to ¥139.16 respectively.
The breached uptrend line, because of inverse polarity, is now expected to act as a resistance line, as should the 55-day SMA.
Downside targets are to be found at the ¥137.77 early-May peak and also along the 200-day SMA at ¥138.08.
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