Headline: Forex Morning Brief: Dollar Mixed as USD/JPY Hits Fresh Cycle High; UK CPI Supports Dovish BoE
The U.S. dollar opened the session to a mixed tone across major FX pairs, with technical levels driving intraday direction in EUR/USD, USD/JPY, and GBP/USD. Traders remain focused on trend bias, risk management, and profit targets as key levels cluster around familiar moving averages and recent swing points.
EUR/USD continues to trade below its 100- and 200-hour moving averages, though dip buyers stepped in at the 38.2% Fibonacci retracement of the downswing from mid-October, keeping a near-term floor in place. USD/JPY extended higher to a new cycle peak after clearing the 155.88 swing barrier—now immediate support—with the next upside focus near 156.77. GBP/USD slipped below 1.3100 before stabilizing in a well-watched zone at 1.30837–1.30956; resistance sits near 1.3140 ahead of the converged 100/200-hour moving averages around 1.3150–1.3155.
Macro drivers remain supportive of current FX trends. In the UK, October CPI printed in line with expectations at 3.6% year over year, with core at 3.4% and services inflation easing to 4.5%. The data keep an 80% probability of a December Bank of England rate cut intact, reinforcing a more dovish policy outlook. In Japan, the finance minister and BoJ governor underscored policy coordination and ruled out FX discussions, while a senior adviser to the prime minister suggested rate hikes are unlikely before March as authorities assess the impact of a ¥20 trillion stimulus. The yen weakened further, lifting USD/JPY and pushing EUR/JPY to fresh record highs.
Risk sentiment in U.S. markets is slightly firmer pre-open after yesterday’s pullback (Dow -1.07%, S&P -0.83%, Nasdaq -1.21%). Futures point modestly higher, with the Dow +45, S&P +15.18, and Nasdaq +66 ahead of Nvidia’s results after the close; Nvidia shares are up 1.59% premarket after falling 2.81% previously. U.S. Treasury yields are a touch lower across the curve: 2-year at 3.566% (-1.5 bps), 5-year at 3.680% (-1.5 bps), 10-year at 4.107% (-1.3 bps), and 30-year at 4.728% (-1.1 bps).
Key Points: – EUR/USD holds below the 100/200-hour MAs, with support near the 38.2% retracement of the mid-October drop. – USD/JPY breaks higher above 155.88; that level turns into support with next target near 156.77. – GBP/USD rebounds from 1.30837–1.30956; resistance seen at 1.3140 and the 1.3150–1.3155 moving-average cluster. – UK October CPI at 3.6% y/y; markets maintain roughly 80% odds of a December BoE rate cut. – Japan signals steady policy coordination; adviser sees BoJ rate hike unlikely before March amid stimulus assessment. – U.S. equities edge up premarket; Nvidia earnings in focus; Treasury yields ease slightly across maturities.
