EUR/USD Technical Analysis
The Euro has fallen a bit during the early part of the trading session on Wednesday, but it looks like we are bouncing back a little bit and that does make a certain amount of sense considering that the 10-year yield in America is drifting a bit lower.
We are sitting right around the 200-day EMA, so it’s not a huge surprise to see if we bounce from here just due to the fact that so many people will be watching the 200-day EMA. If we break down from here, the 1.15 level is my target. I’m not necessarily excited about going long here, I just think you’ve got a situation where it does make sense for a technical bounce.
GBP/USD Technical Analysis
The British pound also fell early during the session, but it looks like the 1.34 level is trying to hold the pair up.
We are sitting right around the 200-day EMA that could come into the picture and if we rally from here, we could see a move towards the 50-day EMA. But if we were to break down below the bottom of the trading session up to now on Tuesday, it could send this market down to the 1.33 level.
Ultimately, this is a market that I think continues to be very noisy around the 200-day EMA and with a significant amount of chop, I think if you start to look at this through the prism of short-term charts, I don’t think we’re ready for a big move. We are just sitting right in the middle of what I think is a 200-pip range.
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The US dollar initially fell against the Japanese yen only to turn around and bounce again. All things being equal, this is a market that I think goes looking to the 160-yen level over the longer term, which is an area that the Bank of Japan most certainly has defended by coming into the market to intervene.
If the market were to fall from here, I’d be watching the 50-day EMA sitting just above the 158-yen level as an area of potential support. Ultimately, if we break down below there, then the market could really start to drop from there. Overall, I believe this is a market that is positive, but there’s that specter of the Bank of Japan causing some issues. A little bit of a pullback here I think is actually healthy.
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