EUR/USD and AUD/USD reverse Tuesday’s US dollar gains while EUR/GBP looks toppish
Outlook on EUR/USD, EUR/GBP and AUD/USD amid European inflation readings and China planning to resume Australian coal imports.
EUR/USD recoups some of Tuesday’s sharp losses on lower-than-expected inflation readings
On Wednesday morning EUR/USD seems to be on track to recoup most of Tuesday’s sharp losses as France joins Germany by publishing lower-than-expected inflation data.
The preliminary annual consumer price index (CPI) in France slid to 5.9% in December versus a forecast 6.4% and dropped by 0.1% on a month-on-month (MoM) basis in December versus a 0.3% rise in November. The cross is fast approaching its 22 December high at $1.0659 while targeting the mid- to late December highs at $1.0715 to $1.0736 which represent good resistance.
This technical view will remain intact while Tuesday’s low at $1.052 holds on a daily chart closing basis. Intraday support above this low can be spotted around the 22 December $1.0574 low.
EUR/GBP comes off its October peak
EUR/GBP's over 3% December rise faltered slightly above the October peak at £0.8867 at the end of December high of £0.8877 with the currency pair slipping ahead of this week’s UK final services purchasing managers index (PMI) and Halifax house price data while European inflation data came in lower-than-expected.
Tuesday’s low at £0.8783 remains in focus, a fall through which and the £0.878 21 October high could lead to a slide back towards the 55-day simple moving average (SMA) at £0.87 taking shape. Good resistance can now be found at the £0.8828 November peak, above which the October and late-December highs can be spotted at £0.8867 to £0.8877.
Only a rise and daily chart close above the recent high at £0.8877 would push the minor psychological £0.90 region back to the fore.
AUD/USD resumes its ascent as China plans to resume Australian coal imports
AUD/USD has not only regained all of Tuesday’s sharp losses but has managed to rise and close on a daily basis above its 200-day SMA for the first time since April 2022 on news that China is planning to reverse a two-year ban on imports of Australian coal.
The cross had been capped by the 200-day SMA in May, June, August and December of last year and the fact that a daily close above it has now been made indicates that further upside to above the $0.6893 December peak is in store. The resumption of the over 10% advance from its October low has the mid-September high at $0.6916 and also the January 2022 low at $0.6968 as well as the late-August high at $0.7009 in its sights.
This forecast remains valid while no unexpected bearish reversal takes the currency pair to below its current January low at $0.6688. Minor support above this low comes in along the 200-day SMA at $0.6853 and at the $0.6801 28 December high.
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.
