Pound sterling affected by BoE's speaker hinting at persistent recession. DAX gains on the back of industrial production edges higher
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USDJPY seeks support
The Japanese yen rallied over better-than-expected Tokyo CPI in December. On the daily chart, a break below August’s low (130.50) has put the buy side under pressure. The latest bounce hit resistance in the supply zone 134.70-135.00 which coincides with the 30-day moving average. The bulls will need to clear the support-turned-resistance of 133.30 before they could turn short-term sentiment around. The psychological level of 130.00 at the bottom of the bounce is a critical floor to keep the dollar steady.
EURGBP attempts to recover
The pound softens as the BoE's chief economist warns of persistent inflation. On the daily chart, the euro is in a consolidation after it lifted last October’s high of 0.8860. A slide below 0.8780 may have prompted intraday traders to take profit, which could cause a choppy price action in the near term. 0.8770 is a fresh support and 0.8720 at the base of the bullish breakout is confluent with the 30-day moving average. Selling pressure could be expected between 0.8830 then 0.8870, but a breakout may trigger a bullish continuation.
GER 40 breaks daily resistance
The Dax 40 climbs as upbeat industrial output in Germany eases fears of a deep recession. A close above December’s high of 14660, a major daily resistance may have put the index back on track. Zooming into the hourly chart, momentum from 14400 is a sign of strong conviction, prompting sellers to cover. In case of a pullback, the fresh support is a key level to keep the bullish bias intact. A brief consolidation could be in play after the RSI went overbought. The psychological level of 15000 might be next when volatility returns.
