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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 USD/JPY stabilize ahead of this week’s US CPI release

​​Outlook on EUR/USD, GBP/USD and USD/JPY ahead of China, Japan and US inflation readings.

euro Source: Bloomberg

​​​EUR/USD tries to stabilize

EUR/USD's bullish reversal off last week’s low at $1.0877 post US nonfarm payrolls, which came in stronger-than-expected but which also saw downward revisions in eleven of the last twelve months, fizzled out at Friday’s $1.0998 high.

​A sparse economic calendar on Monday points towards range trading taking place on Monday. Immediate resistance can be seen along the December-to-January resistance line at $1.0974 ahead of Friday’s $1.0998 peak.

​Minor support lies at Thursday’s $1.0916 low ahead of last week’s $1.0894 to $1.0877 lows.

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

GBP/USD recovers from last week’s low

GBP/USD's bullish reversal from its two-week low at $1.2611, seen last week amid the publication of US nonfarm payrolls, took it to Friday’s high at $1.2771 before the cross slipped back ahead of this week’s US inflation data release on Thursday.

​Wednesday’s high at $1.2676 may well be revisited, below which lie the November-to-January uptrend line, 21 December and current January lows at $1.2622 to $1.2611 which should offer good support.

​A rise above Monday’s $1.273 high is needed, for the November peak at $1.2733 and Friday’s high at $1.2771 to be retested. Further up the mid-December high can be found at $1.2794 and the December five-month peak at $1.2828.

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

​USD/JPY consolidates below last week’s one-month high

​The swift rally in the USD/JPY pair amid pared back US rate cut expectations pushed it to last week’s ¥145.98 high below which the cross is now consolidating.

​Support below Friday’s ¥143.81 low can be seen along the 200-day simple moving average (SMA) at ¥143.32 whereas minor resistance above Thursday’s ¥144.85 high is needed to revisit Friday’s ¥145.98 one-month high.

Further up meanders the 55-day SMA at ¥146.80.

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