The euro accentuates its rebound after Lagarde; EUR / JPY, watch the release!

Key points of the article:

  • The words of Lagarde in Europe supportsnt EUR, those from Maechler the Swiss franc
  • EUR / JPY: A flag pattern may be validated

Prejudice

Resistence

Support

Comment

USD / JPY

Neutral

94

87.3

Bearish channel

AUD / USD

Neutral

0.7266

0.695

EUR / AUD

Neutral

1,528

1,459

EUR / CHF

bearish

1,036

1.02

Bullish bias in support

EUR / GBP

Neutral

0.86

0.837

EUR / JPY

Neutral

140

132.65

Bearish channel

EUR / USD

bearish

1,064

1,034

Bounce off CT

GBP / JPY

Neutral

161.86

155.6

GBP / USD

Neutral

1,264

1,208

USD / USD

Neutral

0.653

0.592

Rebound

USD / CHF

bullish

1.005

0.97

Correction of the increase

USD / CAD

Neutral

1,339

1.2712

USD / JPY

bullish

135

126.95

Consolidation

Lagarde’s words in Europe support the euro, Maechler’s the Swiss franc

The dollar index fell yesterday as the euro rose after the European Central Bank signaled it would abandon negative interest rates and riskier currencies gained ground along with equities. However, these moves faded into the Asian session, where caution returned after Snapchat’s post-close profit warning pushed index contracts lower.

ECB President Christine Lagarde said the bank is likely to move the eurozone deposit rate out of negative territory by the end of September and could increase it further if it sees inflation stabilizing at 2%.

The euro’s recovery comes as the dollar has fallen significantly after already falling last week.

Investors had more appetite for riskier assets on Monday in reaction to Ms Lagarde’s comments and easing concerns about an impending recession in Europe as the US outlook looked less ominous.

The euro was the big winner, climbing 1.13% to $ 1.0697, after rising 3.4% from the multi-year low of $ 1.0349 on May 13.

The US dollar index, which hit a two-decade high of 105.01 on May 13, broke its support at 102.24 yesterday and hit a nearly one-month low.

Speculators’ net long positions on the US dollar fell last week, after reaching their highest level since the end of November the previous week, according to calculations and data from Reuters from the US Commodity Futures Trading Commission released on Friday.

The Australian dollar, which initially showed a moderate reaction to the center-left Labor party’s victory in national elections over the weekend, closed higher.

The Swiss franc strengthened against the dollar after Swiss National Bank board member Andrea Maechler said in an interview published Monday that the bank will tighten monetary policy if inflation in Switzerland remains consistently high. The dollar fell 0.89% against the Swiss franc after hitting its lowest level since late April.

The Chinese sentiment also helped riskier currencies. Shanghai is emerging from a pandemic freeze and an unexpected rate cut in China last week reassured investors.

Last week the yuan had its best week since the end of 2020 and in offshore markets strengthened on Monday at 6.704 per dollar, the highest level since the beginning of May.

EUR / JPY: A flag pattern may be validated

The Euro Yen is moving in a consolidation channel in a medium-term uptrend. Exiting the channel from above would validate a flag-shaped configuration that would relaunch the ascent. Statistically, this figure shows a success rate in 67% of cases.

The objective would therefore be first the recent peak at 140.00 and then the theoretical medium-term target at 150.00.

However, as long as prices stay inside the channel, prices can return to the support zone formed by the polarity line at 132.65 and the 200 period moving average.

Evolution of the euro yen in the daily data:

EUR / JPY technical analysis

Twitter @CDamestoy

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