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Softer USD Allows Technically Oversold Condition to Unwind in EUR/USD, GBP/USD

FOREX
  • GBP/USD defying the bearish near-term outlook to rise to a session high of 1.2175 in recent trade, benefiting from the softer USD backdrop and allowing EUR/GBP to post a second session of losses after the cross rejected a test of the key 200-dma resistance at 0.8710.
  • Any further faltering of the USD rally should allow overbought technical conditions to subside: EUR/USD, GBP/USD (and to a lesser extent, USD/JPY) had posted their most oversold technical backdrop since April last year earlier this week - meaning markets are likely undergoing a corrective recovery, but the medium-term USD uptrend remains intact regardless.
  • The EUR has shrugged off the softer NRW CPI ahead of the national print later today, instead following German yields higher, with the 10y touching 2.8934% today - the highest since 2011.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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