In this article, we have covered the highlights of global market news about the EUR/JPY, USD/JPY, AUD/USD and GBP/USD.
EUR/JPY Price Analysis: Pokes 61.8% Near 138.00 is the Fibo retracement.
After a downward move in the early European session to roughly 138.63, the EUR/JPY pair has now gone sideways. The asset had previously had a significant decline to around 137.50, but it quickly recovered and left a purchasing tail, indicating a prudent buying market structure. In general, bears have maintained control of the cross, thus a respectable retreat move cannot be ruled out.
On the four-hour scale, it is clear that the cross has recovered significantly after falling below the 61.8% Fibonacci retracement at 138.00 (which represents the distance from the low of August 2 at 133.40 to the high of September 12 at 145.64).
A vertical downward move in the 20-period Exponential Moving Average (EMA) approaching 140.00 suggests more weakening.
Additionally, the extreme negative momentum is indicated by the Relative Strength Index (RSI) (14) moving in a bearish band of 20.00-40.00.
The cross will go towards the lows of August 25 at 136.02 and August 16 at 134.90 if it slips below Monday’s low at 137.39.
On the other hand, if the shared currency bulls are able to exceed 50% Fibo retracement around 139.56, they will gain momentum and push the asset higher. This will cause the asset to move toward its peak on September 2 at 140.75 and its low on September 14 at 142.30.
USD/JPY bulls take a pause at 144.00 as a result of BOJ Governor Kuroda’s conflicting remarks.
During the two-day upswing to the first Monday morning in Europe, the USD/JPY declines to 143.80. The recent decline in the value of the yen might be attributed to Bank of Japan (BOJ) Governor Haruhiko Kuroda’s conflicting remarks, particularly in light of market intervention expectations and Russian-related anxieties.
Recently, Kuroda of the BOJ said that the economic outlook is becoming more unclear, especially in light of potential negative risks. However, the policymaker also said that “Japan’s economy is getting up and is probably going to continue recovering.”
The yen pair supported the market’s earlier rush to risk protection as a decline in the GBP/USD, better US data, and hawkish Fed speak propelled discussions of central banks intervening to preserve their own currencies. While the Bank of England’s (BOE) decision is imminent, the People’s Bank of China (PBOC) said that, beginning on September 28, it will increase the foreign exchange risk reserves for financial institutions when they buy FX via currency futures from zero to 20%.
AUD/USD is presently focusing around 0.6400 – UOB.
FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang believe that the AUD/USD exchange rate is still under pressure and might try a further drop below 0.6400.
24-hour view: “Last Friday, the AUD fell to 0.6512 before continuing to fall into early Asian. The abrupt fall is probably going to continue. However, the subsequent support at 0.6400 is probably out of reach at the moment (there is another support at 0.6460). Resistance is located at 0.6530, then 0.6570.
Within the next three weeks: “More than a week ago (14 September, spot at 0.6735), we suggested that the risk for the Australian dollar had changed to the negative. As the AUD declined, we noted that the AUD is still weak and that the emphasis remains around 0.6500 in our most recent story from last Thursday (22 Sep, spot at 0.6600). Today during the early Asian hours, the Australian dollar fell under 0.6500, and we still anticipate more declines. At 0.6400, the next level to monitor is. As long as the Australian dollar stays below 0.6620 (last Friday’s “strong resistance” level was around 0.6705), the downside risk is still there.
GBP/USD: UOB does not rule out a trip to the parity zone.
GBP/USD may return to parity in the near future, according to Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group.
24-hour perspective: “Last Friday’s abrupt and significant decline in the GBP caught us off guard. The pound continued to fall throughout the early Asian hours, momentarily falling below the record low of 1.0400 before rising again. Despite the recovery, GBP is still in trouble. However, severely oversold circumstances indicate that 1.0300 is probably out of reach for now. The minor resistance is around 1.0700, but 1.0810 is probably strong enough to hold any comeback.
Next 1-3 weeks: “Last Friday (23 September, spot at 1.1265), we stated that the likelihood that the British pound would fall to 1.1150 or 1.1100 has decreased. We definitely did not anticipate how quickly the value of the pound fell to 1.0840. GBP hit a new record low today of 1.0520, continuing its downward trend from the previous day. Given the sudden acceleration to the downside, a further slide to 1.0000 is not ruled out. The ‘strong resistance’ at 1.1000 (level was at 1.1370 last Friday) would suggest that the GBP’s weakness has stabilized, on the plus side.
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