The euro has fallen sharply since September, but signs of a pause have emerged, prompting suggestions that the long-term trend of euro strength and yen weakness may have ended.
The euro has fallen sharply against the US dollar and other currencies since September, but the decline has begun to ease as a break below the US$1.10 level comes into view. This is thought to be largely because the widening German-US interest-rate differential has paused.
The pause in the widening interest-rate differential reflects a pause in the rise in US interest rates and a pause in the decline in German interest rates since October. Some believe that capital flight within Europe has also eased.
The euro's downtrend is still likely to continue, and the euro-US dollar pair remains below its 52-week MA. Any rebound is expected to remain limited enough to be viewed as part of the long-term trend.
The euro-yen pair is also likely to remain below its 52-week MA. This would limit any rebound in the euro, prompting a reassessment of the historic uptrend that had been regarded as ending at ¥187.