GBP/USD continued to chop around the 55-DMA ($1.6754) to start the new week as it begins to look comfortable below the $1.6777-1.6827 region. Bulls continue to look for a close above $1.6777 to ease the current bearish pressure and a close above the 21-DMA to shift immediate focus to tests of the $1.6881-1.6916 region. For now bears continue to target the 100-DMA while the $1.6777-1.6827 region continues to cap.
USD/JPY managed to work its way through layers of resistance in the Y102.20-38 region before closing marginally above the 100-DMA which adds support to the bullish case. Initial support has developed at the Y102.36 level but bears need to see a close back below the Y101.89 support to confirm an easing of the renewed bullish pressure and see focus shift back to the 200-DMA. Bulls are now targeting the Y103.02-104.13 region while Y101.89 supports.
The recovery continued to start the new week with EUR/JPY now pressuring the Y139.36-51 resistance region. Bulls look for a close above the 21-DMA to confirm an easing of the bearish pressure and see immediate focus shift to the Y140.61-94 region where the 55 & 100-DMA’s are located. While Y139.36-51 caps bears will continue to look for closes below the 200-DMA to add weight to the bearish case for fresh 2014 lows.
The 21-DMA stalled the move higher last week confirming its significance with the ERU/GBP dipping below the previous initial support at Gbp0.8119 to start the new week after again falling short of the 21-DMA. Failure to surmount the 21-DMA is of some concern to bulls with cracks clearly opening in the up-trend. Bulls now need to see a close above Gbp0.8159 to confirm a break of the 21-DMA and shift focus to the Gbp0.8191-0.8257 region.