EUR/USD and GBP/USD break higher, while USD/JPY risks bearish reversal
Weak jobs numbers hurt the dollar, with EUR/USD and GBP/USD breaking higher while USD/JPY risks reversing lower.
EUR/USD surges through resistance after weak jobs number
EUR/USD has managed to push up into a two-month high following a massive miss on Friday's US non-farm payrolls figure. That came off the back of a retracement into the previous resistance level of $1.199. Crucially, this provides a bullish continuation signal, with the price rising up through the 76.4% Fibonacci resistance level once again.
With that in mind, there is a strong chance we are on our way to breaking up through $1.2243 to provide a wider bullish reversal signal. Nevertheless, there is a good chance of a near-term pullback, with the stochastic rolling over. As such, a short-term decline would look to provide a potential buying opportunity unless the price breaks below $1.199.
GBP/USD breaks from consolidation phase
GBP/USD has managed to break through $1.4006 resistance over the weekend, bringing an end to a phase of consolidation that has lasted the entirety of March and April. That breakout was largely expected, yet the jobs report certainly helped things along.
The result of that break is that we now look towards $1.4241 as the next major hurdle to overcome. Much like EUR/USD, there is a risk of a pullback before long, but a bullish outlook holds unless the price breaks back below the $1.3857 swing low. Until then, further upside looks likely as we see the long-term bull trend come back into play.
USD/JPY likely to weaken again despite early rebound
USD/JPY is on the rise as we kick off a new week, with the pair pushing into the 61.8% Fibonacci level at ¥109.04. Crucially, the breakdown seen on Friday appeared to bring about the beginning of another bearish phase following a rise into the wider 61.8% Fibonacci level at ¥109.63.
The decline from that resistance level points towards a potential period of weakness coming into play. However, with the price rising this morning, the key question is whether we see the bears come back into play once again from here. As such, a bearish outlook holds unless we see the ¥109.49 swing high taken out. Watch out for the bears to potentially come back into prominence between the 61.8% and 76.4% Fibonacci retracement levels (¥109.05-¥109.21).
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
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. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
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
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
