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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/GBP bounces off five-month low, AUD/USD stabilizes post RBA meeting while USD/JPY remains bullish​​​

​​Outlook on EUR/GBP, AUD/USD and USD/JPY as RBA keeps rates on hold but re-iterates its hawkish stance.

GBP Source: Bloomberg

​​​EUR/GBP recovers from five-month low

EUR/GBP finally managed to rise from its £0.8514 five-month January low, made within the June-to-August support area at £0.8519 to £0.8493, and briefly rose to a two-week high at £0.8572 as UK retail sales growth slowed further in January.

​A rise above £0.8572 puts the 9 January low at £0.8587 on the map, ahead of the 55- and 200-day simple moving averages (SMA) at £0.8608 to £0.8626.

​Slips should find support around the 1 February high at £0.8559 and the £0.855 December low.

​A now less likely fall through £0.8514 to £0.8493 would likely push the April 2021 low at £0.8472 to the fore.

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

​AUD/USD range trades above one-month low

AUD/USD's descent from its five-month December peak at $0.6871 has taken the cross to Monday’s low at $0.6469 before the Reserve Bank of Australia (RBA) held its base rate at 4.35% as anticipated.

The central bank cited that progress on inflation "remained high”, that its priority was to return it “to target within a reasonable timeframe” and that it may have to hike rates further in order to do so.

​A minor bounce towards the $0.6525 December and mid-January lows is currently underway. This resistance zone would need to be exceeded for an attempt to the upside to be made. In such a scenario the December-to-January downtrend line and 200-day SMA at $0.6575 to $0.659 would likely cap, though.

​A fall through $0.6469 would have the 11 October high at $0.6445 in its sights, ahead of the August, early-September and mid-November 2023 lows at $0.6365 to $0.6339.

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

​USD/JPY bulls are back in control

USD/JPY briefly made a two-month high at ¥148.89 on Monday, having surged higher on much stronger-than-expected US employment and US Institute for Supply Management (ISM) services data since Friday. Above the January and current February highs at ¥148.80 to ¥148.89 beckons the minor psychological ¥150.00 mark.

​Minor support below the late January ¥148.34 high is seen around the 31 January ¥147.90 high.

​The medium-term uptrend will remain intact while last week’s low at ¥145.90 underpins.

​Were a slip through ¥145.90 to ensue, however, the 55-day SMA at ¥145.64 could be reached ahead of the 200-day SMA at ¥144.72.

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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