EUR/USD, EUR/GBP and GBP/USD as Fed Chair makes slightly hawkish remarks
Outlook on EUR/USD, EUR/GBP and GBP/USD amid hawkish Fed Chair comments and as the UK economy flatlines in the third quarter.
EUR/USD remains side-lined
EUR/USD's minor consolidation below Monday’s near two-month high at $1.0756 continues with it holding above its the 55-day simple moving average (SMA) at $1.0644, though, as the US Federal Reserve (Fed) Chair Jerome Powell leaves the door open for one possible last rate hike.
While the 55-day SMA holds, the medium-term bullish trend remains in play. Were it to be slipped through on a daily chart closing basis, the breached July-to-November downtrend line, now because of inverse polarity a support line, at $1.0588 could offer support.
Resistance is seen at Thursday’s $1.0725 high. Were it and Monday’s high at $1.0756 to be exceeded, the 200-day SMA at $1.0803 would be in focus, together with the $1.0834 July low.
EUR/GBP heads back up towards its £0.8754 late October peak
EUR/GBP is seen heading back up towards its £0.8754 late October high as the British economy stalls in the third quarter (Q3), the weakest performance in four quarters.
The 2 November high at £0.8735 and the 20 October high at £0.8740 are in the process of being tested, ahead of the recent £0.8754 peak. Further up lies the early May low at £0.876.
Good support remains to be seen between the July and September highs and the 200-day SMA at £0.8706 to £0.8689. While it underpins, upside pressure should remain in play.
GBP/USD bounce rejected by 55-day SMA
On Monday GBP/USD's rally faltered just below the 200-day SMA at $1.2435 and since then slid back towards the $1.22 region, having on Thursday’ been rejected by the 55-day SMA at $1.2303 when it tried to recover.
The breached July-to-November downtrend line, now a support line, at $1.2136 may offer support ahead of the key $1.207 to $1.2038 support zone made up of the October lows.
For a bullish reversal to become possible, a rise and daily chart close above Thursday’s high at $1.2308 would need to be seen, above which lies the mid-October peak at $1.2337.
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.
