EUR / USD
Source: Massive (polygon.io)
EUR/USD traded within a relatively narrow range over the past 24 hours, briefly reaching 1.1710 before easing back towards 1.1677. Despite the retreat, the pair remains comfortably above the 200 day SMA at 1.1600, alongside the 20 day and 50 day SMAs and the 30 day VWAP, maintaining the constructive technical structure established by the recent breakout.
The daily RSI has risen to around 74, indicating increasingly overbought conditions following the more than 2% recovery from late July lows. We see the concentration of trading activity around 1.1679 during the early New York session as supportive, although the inability to maintain the move towards 1.1710 suggests some profit taking is emerging as momentum becomes stretched.
A sustained break above 1.1710 would reinforce the bullish structure and could open the way towards the three month high around 1.1835. However, we expect the elevated RSI to increase the risk of near term consolidation or mean reversion. A break below 1.1670 could trigger a deeper pullback towards the 20 day SMA around 1.1600, while the 30 day VWAP near 1.1500 provides more significant support should selling pressure accelerate.
USD / JPY
Source: Massive (polygon.io)
USD/JPY recovered approximately 0.6% to around 159.11 after briefly falling below 158 during the Asian session. Buying strengthened through the New York session, allowing the pair to reclaim both the 200 day and 20 day SMAs around 159. However, price remains below the 30 day VWAP near 160 and the 50 day SMA around 161, leaving the broader technical recovery incomplete.
The daily RSI around 45 remains neutral, suggesting there is room for the recovery to extend without immediately encountering overbought conditions. We see the return above the 200 day SMA as constructive in the near term, particularly after buyers emerged following the early session decline.
A sustained move above 159 could encourage further recovery towards the 30 day VWAP around 160, with the 50 day SMA near 161 representing the next significant resistance. Conversely, failure to maintain the recovery above the 200 day SMA would weaken the near term picture and expose 158 once again. We expect a decisive break below this level to increase downside pressure towards the monthly low around 156.
GBP / USD
Source: Massive (polygon.io)
GBP/USD extended its advance to around 1.3628, having briefly reached 1.3658 during the European morning session. The pair remains comfortably above the 200 day and 50 day SMAs around 1.3400, as well as the 20 day SMA and 30 day VWAP near 1.3500, confirming that the broader technical structure remains firmly supportive.
Momentum is becoming increasingly stretched, however, with the daily RSI reaching approximately 70 after the sustained recovery from late July lows. The retreat from 1.3658 suggests some selling interest is emerging around the recent highs, although we continue to see buyers maintaining control while price remains above 1.3600.
A decisive break above the 1.3650 to 1.3660 resistance area could extend the advance towards higher resistance levels, with the January high around 1.3848 representing a broader upside target. In the near term, however, we expect overbought conditions to increase the likelihood of consolidation. A break below 1.3600 could encourage profit taking towards the 20 day SMA and 30 day VWAP around 1.3500, which we see as the more important support area for maintaining the current bullish structure.
