USDJPY fell 1.23% throughout Thursday’s trading. The 75 basis point increase in interest rates has weakened the Dollar as the U.S. 10-year Treasury yield retreats below the 3.3% level. The interest rate difference between the U.S. and Japan will further encourage carry trades as the interest rate differential increases. The BoJ’s insistence on an easy money policy shows a stark contrast between the two central banks.
On the technical side, USDJPY has met its fresh resistance at 135.6, while support levels at 133.5 and 132.5 remain firmly intact. RSI for USDJPY indicates 66.18, as of writing. On the four-hour chart, USDJPy currently trades above its 50, 100, and 200-day SMA.
Support: 133.5, 132.5
EURUSD rebounded throughout Thursday’s trading. The dollar fell sharply after the FOMC raised interest rates by 75 basis points. The broad-based Dollar weakness allowed the Euro to rebound from earlier losses during the Europan and Asia trading hours. This short-term rebound, however, might not be sustainable as the interest rate difference between the Fed and the ECB has now increased even further.
On the technical side, EURUSD has found fresh support around the 1.038 price region. Near-term resistance has formed near the 1.049 price region. RSI for the pair has recovered from the oversold territory and is currently indicating 43.6. On the four-hour chart, EURUSD trades below its 50, 100, and 200-day SMA.
GBPUSD gained 1.5% throughout Thursday’s trading. The FOMC has increased interest rate by the most significant margin in 40 years, in an attempt to control soaring inflation. Fed chair Jerome Powell has also indicated that either a 50 or 75 basis point interest rate hike is likely at the FOMC’s July meeting. The BoE is set to announce its interest rate policy and financial guidance during the European trading session.
On the technical side, GBPUSD has rebounded strongly from our previously estimated support level of 1.20824, the pair met fresh resistance around the 1.218 price region. RSI for Cable is currently sitting at 66.16. On the four-hour chart, GBPUSD is trading above its 50-day SMA, but below its 100 and 200-day SMA.
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