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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 surge while USD/JPY establishes a new lower low

Dollar weakness is driving EUR/USD and GBP/USD higher, while USD/JPY has carved out a new lower low in its current pullback.

EUR/USD Source: Bloomberg

EUR/USD on the up thanks to Fed

A dovish Federal Reserve (Fed) trumps a dovish European Central Bank (ECB) it seems. The Fed’s shift last week has seen EUR/USD hit a three-month high this morning, raising the possibility that a bottoming process continues to be seen in EUR/USD.

The price held $1.112, and now it has cleared the 200-day simple moving average (SMA) we may see further bullish momentum emerge. The next upside targets are $1.145 and then $1.1554.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

GBP/USD returns to key resistance

The bounce here for GBP/USD has carried the price back to the $1.275 zone that stifled progress over the past four weeks.

Above $1.278 the price heads towards $1.287, and then $1.304. A drop at the end of last week ran into support around $1.265, so a renewed bearish view may develop if we move below this level.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

USD/JPY pauses after new lower low

The current drop from the April highs established a new lower low at the end of last week for USD/JPY, as the crawl higher in the first half of June gave way to a swift drop.

The bearish view remains firmly in place unless the price moves back above ¥108.80. The next stop to the downside is ¥106.80, the low from 3 January.

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

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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