EUR/USD, GBP/USD and USD/JPY as US yields surge to 2006/07 highs
Outlook on EUR/USD, GBP/USD and USD/JPY amid rallying US yields and lower Japan inflation.
EUR/USD levels out despite heightened Middle East tensions and rising yields
Despite ongoing Middle East tensions, a hawkish Federal Reserve (Fed) and rising US Treasury yields EUR/USD continues to range trade above last week’s low at $1.0496 but below last week’s high at $1.0639. A break out of this range today looks pretty unlikely at the moment.
A rise and daily chart close above $1.0639 next week would indicate that a bottom is being formed with the July low and 200-day simple moving average (SMA) at $1.082 to $1.0834 representing potential upside targets.
A fall through $1.0496 would engage the key $1.0484 to $1.0444 support area, made up of the mid-November high, 7 December and 6 January lows. It needs to hold for EUR/USD to be able to bottom out.
GBP/USD drifts lower towards its $1.2038 early October low
GBP/USD slide towards its early October seven-month low at $1.2038 is showing no signs of pausing as the greenback appreciates in line with surging US yields.
A fall through $1.2038 would put the psychological $1.20 mark on the map.
Minor resistance above last week’s $1.2123 low comes in around the $1.2216 to $1.2225 region which has capped the cross since last Friday. While below this resistance area, downside pressure retains the upper hand.
USD/JPY approaches the psychological ¥150.00 mark
USD/JPY nears the psychological ¥150.00 mark as Japan inflation drops to its lowest level in a year. Traders are reticent to take the cross above this psychological resistance for fear of Bank of Japan (BoJ) currency intervention. Marginally above ¥150.00 lies the early October high at ¥150.16.
Support can be spotted along the July-to-October tentative uptrend line at ¥149.42. While the next lower 17 October low at ¥148.85 holds, the uptrend remains intact.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. 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.
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