EUR/USD extends gains while USD/JPY and EUR/GBP consolidate
Outlook on EUR/USD, USD/JPY and EUR/GBP amid Eurozone retail sales.
EUR/USD extends despite strong NFP data
EUR/USD continues its advance despite Friday’s stronger-than-expected US Non-Farm Payroll (NFP) data which came in at 263k newly created jobs versus an expected 200k which only briefly led to retracement to $1.0429 on Friday before the cross resumed its ascent.
Key resistance between the 38.2% Fibonacci retracement of the 2021 to 2022 bear market, the 55-week simple moving average (SMA), the late June 2022 high and the March 2020 pandemic low between $1.0608 to $1.0638 is thus still being targeted but may soon cap.
The currency pair is supported by the $1.05 to $1.0482 region, which consists of minor psychological support and the November highs, as well as Friday’s $1.0429 low. More significant support can be spotted between the November-to-December uptrend line and the 200-day SMA at $1.038 to $1.0365.
EUR/GBP remains under pressure ahead of European retail sales
EUR/GBP weighs on its mid- to late October lows at £0.858 to £0.8572 amid Eurozone retail sales data for October with last week’s low and the 200-day SMA at £0.8548 to £0.8541 about to be reached.
This area may offer support on Monday but if it were to give way during the week, the mid-August high at £0.8512 would be in sight.
Minor resistance can be found along the two-month downtrend line at £0.862 and further up at last week’s highs at £0.8661 to £0.8675. While these cap, the November-to-December downtrend remains valid.
USD/JPY flirts with 200-day SMA
USD/JPY continued its descent for a second week in a row amid a weaker greenback following the US Federal Reserve (Fed) Chair Jerome Powell’s comments last week regarding a slower pace of rate hikes being envisaged to combat persistently high inflation.
With the currency pair having now reached its 200-day SMA at ¥134.62, short-term stabilisation is expected to be witnessed. Therefore, while Friday’s low at ¥133.63 underpins, a recovery bounce back towards the ¥135.85 early August high may ensue.
More significant resistance sits further up at the ¥137.68 mid-November low. While the cross remains below last week’s ¥139.89 high, the October-to-December downtrend remains intact.
This information has been prepared by IG, a trading name of IG Markets 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.
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
