EUR/USD slips to six-week low while GBP/USD and USD/JPY hold
Outlook on EUR/USD, GBP/USD and USD/JPY amid softening Japanese inflation.
EUR/USD slips to six-week low
EUR/USD dropped through its 200-day simple moving average (SMA) at $1.0845 on Friday morning after the European Central Bank (ECB) kept its rates steady and maintained its hawkish stance.
The cross is now trading in six-week lows and is approaching the 6 November high and December low at $1.0756 to $1.0724 which represent the next potential downside target zone.
Minor resistance above the 200-day SMA at $1.0845 sits at the $1.0922 early-January low.
GBP/USD recovery is running out of steam
GBP/USD is seen giving back its recent gains which took it to this week’s high at $1.2775 despite UK consumer confidence hitting a two-year high.
Tuesday’s low and the 55-day SMA at $1.2649 to $1.2645 may thus soon be reached. Below this support zone lies the more significant $1.2612 to $1.2597 area which consists of the late-December to January lows.
Above Friday’s intraday high at $1.2716 lies minor resistance around Thursday’s $1.2742 high ahead of this week’s $1.2775 peak.
USD/JPY advance is taking a breather as Japan inflation subsides
USD/JPY last week rose to a six-week high at ¥148.80 but this week slid to ¥146.65 before stabilizing as Japanese core consumer inflation hit its lowest level since March 2022 and slid below the Bank of Japan’s (BoJ) 2% target for the first time since May 2022. This takes the pressure off the central bank to raise rates anytime soon.
While ¥146.65 underpins, the cross is expected to continue to advance within its 2024 uptrend channel with last week’s ¥148.80 high and then the psychological ¥150.00 region remaining in sight.
Were a slip through ¥146.65 to occur, though, the 5 and 11 January highs and 55-day SMA at ¥146.41 to ¥145.93 may be reached instead.
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.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
