The US dollar continues to rebound, with the DXY index going high for the second day in a row, fueled by caution on Wall Street ahead of key inflation data and US debt ceiling talks. In response, EUR/USD plummets to its lowest level since April 19th, while USD/JPY slowly recovers from a sharp sell-off last week. Here’s a technical analysis of both currency pairs, including key price levels to watch:

For EUR/USD, the exchange rate has been in a lateral consolidation channel since mid-April, and it’s now its nearly approaching a critical support level at 1.0920-1.0915. DIX Index needs to defend this floor to avoid further decline towards trendline support at 1.0850.

Conversely, a reversal higher could face resistance at 1.1090/1.1100 and a move towards 1.1200. For USD/JPY, the pair found support near 133.85/133.75, but bullish conviction is lacking. To have confidence in a bullish outlook, bulls need to recapture the 200-day simple moving average at 137.00 and aim for the 2023 highs at 140.20.

If sellers regain control, the technical floor at 133.85/133.75 could open the door to a downside move toward 131.55. Click here for more Japanese Yen News.