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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

​​​EUR/USD, GBP/USD and AUD/USD drop as greenback fights back​​​

​​Outlook on EUR/USD, GBP/USD and AUD/USD as investors reassess odds of Fed March rate cut.

EUR/USD chart Source: Bloomberg

​​​EUR/USD slips through uptrend line as US dollar appreciates

EUR/USD'S slide from last week’ s high around the $1.10 mark has taken it through the November-to-January uptrend line at $1.093 as the US dollar climbs on expectations US data such as upcoming retail sales will show the US Federal Reserve (Fed) may yet be steered into leaving rates on hold in March.

​In focus are the early January lows and the 55-day simple moving average (SMA) at $1.0894 to $1.0877 which are expected to offer support. If not, the 200-day SMA at $1.085 may be reached as well.

​Immediate resistance above the breached uptrend line sits at Monday’s $1.0946 high and is followed by Tuesday’s $1.0967 high. Further up lies stronger resistance at the 5 and 11 January highs at $1.0998 to $1.1001.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​GBP/USD weighs on November-to-January uptrend line

GBP/USD is seen coming off last week’s $1.2786 high as investors reassess the probabilities of the first Fed rate cut being seen in March and as the greenback appreciates on the back of this.

​The November-to-January uptrend line at $1.269 is under pressure, a daily chart close below which may lead to the early January low at $1.2611 being revisited.

​Resistance above Tuesday’s $1.2716 intraday high comes in between the 2 and 11 January highs at $1.276 to $1.2786.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

​AUD/USD drops to one-month low

AUD/USD's descent from its five-month December peak at $0.6871 has resumed amid worsening Australia consumer confidence data and an appreciating US dollar.

​The October-to-January uptrend line is being slipped through with the 55-day SMA at $0.6623 offering support. Were it and Tuesday’s intraday low at $0.661 to be slid through, though, the 200-day SMA at $0.6584 would be back in sight ahead of the $0.6525 to $0.6523 support area. It consists of the early November high and the early December low.

​Minor resistance above Tuesday’s $0.665 intraday high lies at Friday’s $0.6678 low and more significant resistance in the $0.6728 to $0.6734 region where several daily highs were made in early January. While they cap, the medium-term trend remains bearish.

AUD/USD chart Source: IT-Finance.com
AUD/USD chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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