EUR/USD is nursing minor losses ahead of the Wall Street. The pair hit a fresh five-week high early this morning at $1.0782 as the Euro gained on hawkish commentary from the ECB’s Nowotny late yesterday but surrendered gains through the European/US crossover. The pair did find a modest bid as the Dollar softened after the US Michigan Sentiment report showed a notable drop in the inflation outlook. From a technical view, we may find some resistance at the overnight high followed by the February 6th high at $1.0802. On the downside, today’s lows at $1.0728 and yesterday’s low at $1.0704 are in focus.
GBP/USD is higher ahead of the Wall Street close, trading at its best level since the start of the month and on course for its best weekly gain since January. The pair rallied sharply yesterday after the BoE minutes offered a more hawkish outlook than many had expected and maintained the momentum today. A softer US Dollar has also helped underpin the pair after some mixed macro releases – the main focus was the soft inflation outlook figures in the Michigan Sentiment report. Today’s high at $1.2404 was our first resistance level which was also the March 1st high, above which we target the February 28th high at $1.2470. On the downside, today’s low at $1.2321 and yesterday’s low at $1.2239 are in focus.
USD/JPY fell again today, reaching a low of ¥112.58 in recent trade, the lowest level since February 28th. The pair had already began to drift lower during the European morning session amid a softer US Dollar and losses quicker after the US Michigan Sentiment report showed a notable deterioration in the inflation outlook. Of note, US Treasury Secretary and Japanese Finance Minister Aso said they have agreed it was important to maintain the G7 and G20 agreements on currency policy. From a technical view, we look for support at the February 28th low of ¥111.67 followed by the February 8th low at ¥111.57. On the upside, today’s/yesterday’s high at ¥113.49/54 may offer resistance ahead of the March 6th/8th low at ¥113.56/61
GBP/EUR is ahead this afternoon, trading a new weekly high of €1.1538. The pair saw a strong rally yesterday after the BoE minutes offered a more hawkish outlook than many had expected but lost momentum overnight before buyers remerged again this afternoon. From a technical view, we look for resistance at the of the March 8th high at €1.1555 followed by the March 7th high of €1.1572. On the downside, the earlier low at €1.1446 and yesterday’s low at €1.1414 are in focus.