A pause in downward moves for EUR/USD and GBP/USD is matched by a consolidation for USD/JPY following its huge rally.
EUR/USD ticks higher for a third day
EUR/USD continues to gain, recouping losses from the recent lower low. However, the downtrend is still firmly in place. So, while we might see a continued rebound towards $1.11 or even $1.12, the outlook still points towards additional losses.
In the short term, a reversal back below $1.09 would put the March low back in view.
GBP/USD struggles to move higher
After nearly hitting $1.30 the GBP/USD price has begun to recover, but only timidly.
The fresh lower low from this week puts new strength into the downtrend. A possible rebound could see the price head back towards $1.32, but even above here a lower low is still likely. Depending on how the Federal Reserve (Fed) and Bank of England (BoE) meetings go, sterling may find some room for upside.
USD/JPY holds above ¥108
The surge in USD/JPY has been one of the most remarkable moves of late, although it has been overlooked due to the rallies in oil prices.
As the preceding two pairs have hit lower lows, this has surged to a new higher high. ¥108.61 is the high from the beginning of 2017, and above here ¥124.45 and then ¥125.75 come into view over a medium-term view. A reversal towards ¥115.00 would leave the uptrend intact and establish a higher low.
Chris Beauchamp | Chief Market Analyst, London
16 March 2022