Post-FOMC moves spark volatility in EUR/USD, GBP/USD and USD/JPY
Initial USD weakness in the wake of the Fed meeting has given way to a recovery for the greenback, prompting price gyrations in key FX pairs.
EUR/USD stuck below $1.20
A close above $1.20 still eludes the EUR/USD pair, which is struggling to make headway despite the rally from last week’s lows. A more bullish view requires a break above this level, opening the path to trendline resistance from the January high, likely around $1.21.
With rising stochastics and a potential bullish moving average convergence divergence (MACD) crossover the longer-term uptrend may well have been revived, with a more bearish view requiring a reversal back below $1.19 at the least.
GBP/USD recovering in wake of FOMC
The past two sessions have seen a strong recovery that has arguably revived the uptrend. The 50-day simple moving average (SMA) at ($1.3813) remains untested once again, but with a higher low now in play a move back towards $1.42 and the latest higher high seems likely.
Sellers were unable to drive the price below $1.38, leaving the buyers to dictate the move, and with a weakening of the US dollar in the wake of the Federal Open Market Committee (FOMC) meeting the way seems clear for further upside.
USD/JPY fights to hold gains
The USD/JPY pair continues to grudgingly give back some of its gains, but we have seen four days where the price has ended well off the highs but firmly above the lows, a sign of how closely-fought these moves have been.
The trend change from earlier in the year remains intact, so even a bigger drop towards ¥107 would not necessarily change the overall outlook, but it might be time for USD/JPY to finally see a move to the downside after the huge gains of January and February.
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.
