EUR/USD, GBP/USD recover from multi-month lows while USD/JPY tops out
Outlook on EUR/USD, GBP/USD and USD/JPY as the US dollar slips on month-end profit taking.
EUR/USD recovers from nine-month low
As the US dollar, yields and oil price retreat from their multi-month highs at the end of September, EUR/USD recovers from this week’s low at $1.0488 towards the mid-September low at $1.0632.
This week’s nine-month low was made marginally above major support which consists of the mid-November high, early and December low and January low at $1.0484 to $1.0444.
Initial resistance comes in at last Thursday’s $1.0617 low and more important resistance between the May low and mid-September low at $1.0632 to $1.0636.
GBP/USD bounces off six-month low
End of month profit taking in the US dollar amid dovish talk by Federal Reserve (Fed) members Goolsbee and Barkin and better-than-expected UK gross domestic product (GDP) on the headline year-on-year (YoY) print, as well as the business investment metric have helped GBP/USD bounce off its six-month low at $1.2111.
Better-than-expected UK revised business investment numbers also aid the cross head towards its September downtrend channel resistance line at $1.228. Above this level minor resistance can be spotted at the $1.2309 May low and significantly further up along the 200-day simple moving average (SMA) at $1.2437. While remaining below it, the medium-term bearish trend remains intact.
A fall through the September low at $1.2111 would push the minor psychological $1.20 mark to the fore.
USD/JPY comes off its 10-month high
USD/JPY's 10-month rise has taken it to this week’s ¥149.70 high before topping out as end-of-month profit taking has led to a softening in the US dollar from its lofty heights.
Better-than-expected Japan preliminary industrial production also contributed to the cross slipping through its July-to-September uptrend line at ¥148.72.
Below it potential support can be found around the ¥147.87 early-September high. Further down lies last Thursday’s low at ¥147.33. While this minor support area underpins, the July-to-September uptrend remains intact despite the cross short-term topping out.
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.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
