Dollar weakness weighs on USD/JPY but lifts EUR/USD and GBP/USD
Last week’s US data prompted a fall in the greenback, but caution prevails this morning ahead of Powell’s speech today.
EUR/USD looks to renew uptrend
Friday’s US data provided the EUR/USD with the dollar weakness it needed to push back towards $1.07 and then look for further gains. After the consolidation of December and early January, which found buyers in a dip towards the 50-day simple moving average (SMA), the price has now moved back above $1.07, and a move towards $1.08 appears to be developing.
A daily close above $1.085 would point the way towards a fresh bullish view. Sellers have once again been shut out of price action, and a move back below the 50-day SMA would be needed to suggest some short-term weakness.
GBP/USD back above 200-day MA
The past two GBP/USD sessions have seen the price move back above the 200-day SMA, and now a move back towards the December high at $1.24 seems likely. The daily moving average convergence/divergence (MACD) appears to be on the cusp of another bullish crossover, having declined during the second half of December. Above $1.24 the May high at $1.2655 comes into view.
Last week saw the price hold around the $1.198 level, and above the 50-day SMA, so a move back below this would provide an indication of some potential short-term weakness.
USD/JPY edges up
After falling back on Friday USD/JPY attempted to recover on Monday, but gains faltered. For the moment the bearish view is back in place, but a move above ¥134.00 could signal that a short-term recovery is in progress. But with a ‘death cross’ of the 50-day SMA below the 200-day SMA likely in coming sessions the picture is likely to turn more bearish.
Additional downside would target ¥130.00, where buyers stepped in last week, while below this the May 2022 low at ¥126.70 is the next target.
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