British Pound Extends Rally, Japanese Yen Weakens Across the Board
The British Pound pushed higher against the greenback on Tuesday, with the exchange rate crossing above the 20-Day SMA (1.5060) to a high of 1.5088, and the currency may continue to retrace the decline from the previous week following the rebound ahead of 1.4800. The GBP/USD is nearly 96pips higher on the day after moving 68% of its average true range, and the pound-dollar may continue to trend higher going into the U.S. trade as market participants raise their appetite for risk. At the same time, the 120-SMA (1.4931) looks poise to cross above the 240-SMA at 1.4938, and we may see the pair continue to trend higher over the week to test the upper bounds of its recent range, which is confined by the 3/17 high at 1.5376. However, as the 30-minute RSI pushes into overbought territory, the pound-dollar may pull back before we see a break above the 2/26 low of 1.5151.
The Japanese Yen weakened across the board and is the worst performing currency against the greenback as investors increase their appetite for risk. The USD/JPY is slightly higher from the open after moving 71% of its daily ATR, but the appears to be tapering off ahead of the North American trade as it fails to test the previous day’s high at 92.78. As a result, we are likely to see the dollar-yen hold along the 120-SMA at 92.52, but a shift in risk sentiment could stoke increased volatility in the exchange rate as risk trends continue to dictate price action in the currency market.
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