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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

​​EUR/USD, EUR/GBP and GBP/USD rally post US Fed 25 bps rate hike

​​Technical analysis on EUR/USD, EUR/GBP and GBP/USD within their fundamental context.

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​​​EUR/USD surges to ten-month high on 25 bps Fed rate hike

EUR/USD rallied to a ten-month high and broke through the psychological $1.10 barrier for the first time since April 2022 as the US Federal Reserve (Fed) raised the fed funds rate by 25 basis points (bp) to 4.50% to 4.75% and its chairman Jerome Powell mentioned the word “disinflation” several times in his comments, leading to a rebound in risk appetite and a weaker US dollar.

​The cross now trades around the $1.10 mark with the November 2021 low and the March 2022 high at $1.1185 being in focus, as well as the 200-week simple moving average (SMA) at $1.1226 and perhaps even the 61.8% Fibonacci retracement of the 2021-to-2022 bear market at $1.127.

​Slips should find support between the late April 2022 high and the 50% retracement of the 2021 to 2022 descent as well as last week’s high at $1.094 to $1.0929.​ While Tuesday’s low at $1.0802 underpins, the medium-term uptrend remains intact.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​EUR/GBP is gunning for its £0.8897 mid-January high

​Earlier this week EUR/GBP revisited but then rallied off its December-to-January uptrend line at £0.8763 whilst awaiting Thursday’s European Central Bank (ECB) and Bank of England (BoE) rate decisions with both central banks expected to hike rates by 50-bp later today.

​The January high at £0.8897 is currently being revisited, a rise above which would lead to levels last traded in September 2022 being reached with the minor £0.90 mark being targeted.

​Minor support below the £0.8877 December high is to be found around last week’s £0.8852 high. While Wednesday’s low at £0.8817 underpins, immediate upside pressure should be maintained.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

​GBP/USD has the $1.2446 December high in its sights

GBP/USD is once more heading up towards the December high at $1.2446 as traders await to hear by how much the BoE will raise rates today with the market anticipating a 50-bp hike to 4%.

​On the way up resistance can be spotted between the December and late January highs at $1.2431 to $1.2448. If overcome, the $1.25 mark would be next in line.

​Strong support remains to be seen between the late January and early February lows at $1.2272 to $1.2263 as well as along the September-to-February uptrend line at $1.2232.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

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. See full non-independent research disclaimer and quarterly summary.

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