EUR/USD, GBP/USD try to stabilize amid heightened Middle East tensions while EUR/GBP pauses
Outlook on EUR/USD, EUR/GBP and GBP/USD amid the ongoing Israel/Hamas crisis.
EUR/USD tries to hold amid heightened Middle East tensions
Last week’s EUR/USD rejection by the upper July-to-October downtrend channel resistance line at $1.0639 has been followed by a swift sell-off as US consumer price index (CPI) inflation came in slightly higher-than-expected and heightened Middle East tensions led to safe haven flows into the US dollar.
Below Friday’s low at $1.0496 lies the key $1.0484 to $1.0444 support zone, made up of the mid-November high, 7 December and 6 January lows. Provided it holds, the pair may still bottom out from a medium-term perspective.
Minor resistance sits at Friday’s $1.0558 high and further up at the previous Friday’s high at $1.06 and then the late September high at $1.0617. Further resistance sits at the May low and mid-September low as well as this week’s high at $1.0632 to $1.0639. Only a rise and daily chart close above these levels would confirm a bottoming formation.
EUR/GBP recovers from last Friday’s £0.8617 low
EUR/GBP’s descent from its £0.8706 September high has taken it to last week’s £0.8617 low from where the cross is currently recovering ahead of Wednesday’s UK inflation data.
Good support now sits between the late August high, late September low and last week’s low at £0.8631 to £0.861 while minor resistance comes in at last week’s high at £0.8664. Above it sit the late June and mid-August highs at £0.8658 to £0.8669 which are likely to cap, if reached.
GBP/USD tries to stabilize following last week’s sharp sell-off
GBP/USD’s rise from its early October seven-month low at $1.2038, for six straight days to last week’s $1.2337 high was followed by a sharp sell-off as the Israel/Hamas war led to flight-to-safety flows into the greenback.
A drop through Friday’s low at $1.2123 and the next lower $1.2106 previous Friday low could lead to the early October low at $1.2038 and the psychological $1.20 mark being revisited.
While Friday’s low at $1.2123 underpins, though, Friday’s high at $1.2225 may be retested. If overcome, the late September high at $1.2271 would be back in the frame.
The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.
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
- Take your position
- 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.
