EUR/USD and GBP/USD fall back as USD/JPY claws back losses
The dollar is on the up this morning, pushing down EUR/USD and GBP/USD while boosting USD/JPY off its session lows.
EUR/USD falls sharply in opening trading
The new year has begun with losses for EUR/USD, putting the first serious dent in the uptrend since mid-November. The pair made steady progress during December, but gains stalled around $1.07. The dollar has begun 2023 on the front foot, pushing higher and causing EUR/USD to drop back below $1.06.
Additional declines would then bring $1.04 into view, a support zone in May and June and also resistance in August and November. For the moment, the medium-term view still leans bullish, though a deeper retracement below the 200-day simple moving average (SMA) would put further pressure on that view.
GBP/USD drops back below 200-day MA
GBP/USD continues its retreat from the December high, and the price has dropped back below the 200-day SMA in early trading. Additional declines will bring the price to the $1.183 zone, while below this the 100-day SMA comes into play as a possible area of support.
Buyers will be looking for a recovery back above $1.21 that will reverse the bearish impression of the past three weeks and provide the foundations for a bounce towards $1.24.
USD/JPY recoups losses in early trading
The steady decline with USD/JPY since the October high has been interrupted by a dollar revival on the first full day of trading for 2023. However, even this does little to change the current bearish outlook, with a ‘death cross’ of the 50-day SMA below the 200-day SMA likely to occur in coming sessions.
The brief rally in late December ran out of steam around ¥134.30, and it will require a move back above ¥135.00 and then the 200-day SMA to suggest that a medium-term low has been formed. The price now finds itself in the zone around ¥130.00, which provided resistance back in April, as well as support in late July. A drop below this zone boosts the bearish view and means ¥126.80 becomes the next area of possible support.
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