EUR/USD, GBP/USD recover from multi-week lows while USD/JPY surges ahead
Outlook on EUR/USD, GBP/USD and USD/JPY amid German ZEW, record UK wage growth and solid Japan economy.
EUR/USD recovers from five-week low
EUR/USD’s slide from its $1.1275 July peak has taken it to Monday’s five-week low at $1.0875 before recovering on Tuesday morning ahead of Germany’s ZEW economic sentiment publication.
The cross may recover to the 55-day simple moving average (SMA) at $1.0948 around which it may run out of steam, though. Further up lies the minor psychological $1.10 region around which it oscillated for much of August.
A, for Tuesday, unexpected slip through Monday’s $1.0875 low would push the $1.0834 July low to the fore, ahead of the 200-day SMA at $1.0783.
GBP/USD bounces off six-week low on record UK wage growth
GBP/USD is seen bouncing off its $1.2617 six-week low as UK wage growth hits a record high, leaving the door open for the Bank of England (BoE) to continue on its monetary tightening path.
Average wages excluding bonuses in the UK increased 7.8% year-on-year (YoY) in the second quarter of 2023, the most on record and significantly above expectations of 7.4%. Meanwhile, the unemployment rate edged higher to 4.2%, the highest since late 2021, while the number of job vacancies fell by 66K.
GBP/USD is likely to revisit its 55-day SMA and also its July-to-August downtrend line at $1.2746 to $1.2764. Only a rise and daily chart close above the next higher $1.2819 high seen last week would technically indicate that a bullish reversal is taking place.
Good support remains to be seen between the early and mid-August lows at $1.2621 to $1.2617.
USD/JPY trades in nine-month highs despite strong Japan growth
USD/JPY is on track for its seventh consecutive day of gains and trades at levels last seen in November 2022 while aiming for the psychological ¥150.00 region.
The continued advance in the USD/JPY pair comes despite Japan’s economy growing at a faster pace than expected in the second quarter of 2023.
The June peak and accelerated July-to-August uptrend line at ¥145.07 to ¥144.96 should offer support.
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.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
