Risk aversion has hit FX markets, with a flight to safety taking place, resulting in swift reversals in a number of currency pairs.
EUR/USD break higher suffers sharp reverse
A revival in the US dollar resulted in EUR/USD’s bounce being reversed yesterday, and with the price back below the 50-day simple moving average (SMA) of $1.2154 and daily stochastics rolling over the bearish view has been given a new lease of life, at least in the short term.
In the first instance we have rising trendline support from the February lows that may provide support, and then below this the 100-day SMA at $1.202. A move back above $1.22 negates this bearish view.
GBP/USD drops for a second day
The selling in other markets has hit GBP/USD, wiping out most of the move of the past week that carried the price to $1.42.
Further declines now seem likely, towards the rising 50-day SMA at $1.37, bringing the price back to this key zone that provided some volatility on the way up.
USD/JPY reverses from higher high
The USD/JPY price has pulled back from its latest higher high, leaving the uptrend firmly in place.
Further declines would target ¥105.50, the 200-day SMA, and then down to ¥105.00 and the low from earlier in the week. A bounce back above ¥106.40, around yesterday’s highs, would put the buyers firmly back in charge, but for now we will have to watch to see if there is any recovery from the early weakness, or whether more losses are on the way.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. Dragonmint FX does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Dragonmint FX nor its advertisers.
