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CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

EUR/USD and GBP/USD come off their five-month highs

Outlook on EUR/USD and GBP/USD as traders square their books ahead of year-end.

FX display image Source: Bloomberg

EUR/USD comes off five-month high

EUR/USD managed to rise to $1.1139, close to its 27 July high at $1.1149, before reversing lower amid an appreciating US dollar on short-covering into year-end.

The fall through the accelerated December uptrend line at $1.1070 puts the November peak at $1.1017 and the mid-December high at $1.1009 potentially back on the cards. This support area is likely to hold into year-end, though.

Above Friday’s intraday high at $1.1084 sits Wednesday’s $1.1122 high ahead of Thursday’s $1.1139 five-month high.

EUR/USD Daily Chart Source: ProRealTime
EUR/USD Daily Chart Source: ProRealTime

GBP/USD loses upside momentum into year-end

GBP/USD briefly made a new five-month high at $1.2828 on Thursday before giving back some of its gains as traders bought back their short US dollar positions.

Since negative divergence accompanied the daily Relative Strength Index (RSI), a possible top may be formed in the first week of 2024 which could take the currency pair through its November-to-December uptrend line at $1.2650. First, though, a fall through Thursday’s low at $1.2713 would need to occur.

Resistance remains to be seen at last week’s high at $1.2762 above which sits the more significant $1.2794 to $1.2828 resistance area which consists of the 10 August high at $1.2819 and the recent December peaks.

GBP/USD Daily Chart Source: ProRealTime
GBP/USD Daily Chart Source: ProRealTime

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