Market Analysis: The Yen and European Currencies Headed to New Lows

The main currency pairs began the last five-day trading period of September with a new wave of growth for the American currency. Changes in the Fed’s point forecast for next year provided powerful support to the dollar, which, in turn, contributed to the search for the bottom in the euro, yen and pound.
The GBP/USD currency pair is testing support at a significant level of 1.2200, the EUR/USD pair is heading towards the January extremes of this year, and the USD/JPY pair has resumed growth in the direction of 150. Apparently, in the coming trading sessions, we can expect another upward impulse on the greenback. At the same time, we must take into account that these pairs are very close to important ranges, the test of which may end in a corrective rollback or reversal.

GBP/USD

The pound turned out to be quite susceptible to the outcome of the recent Bank of England meeting. The regulator left the rate at the same level, while analysts predicted a rate increase of another 0.25%. Add to this a number of weak macroeconomic indicators from the UK, published last week, and we get a stable downward trend for GBP. The price has already dropped below 1.2200, and since there are no reversal combinations, a test of 1.2100-1.2000 may happen.
From the fundamental analysis point of view, today, we are waiting for data on the number of building permits issued in the United States. The US Consumer Confidence Index for September will also be published (17:00 GMT+3).

EUR/USD

The euro/US dollar currency pair has very little time left before testing important support at 1.0500. It is worth noting that the price has not fallen below this level for more than six months; a sharp breakthrough of the current levels will open the way to parity.

Today (10:00 GMT+3), it is worth paying attention to the speech of ECB representative Philip R. Lane.

USD/JPY

As expected, the US dollar/yen currency pair continues to grow towards the extremes of 2022 at 150.00-151.00. The Japanese regulator left the base rate at the same level. Are officials ready to resort to currency interventions as the pair is approaching the 150.00 level?

At 02:50 GMT+3, we are waiting for the publication of the minutes of the last meeting of the BOJ.