EUR/USD, GBP/USD rally while EUR/GBP stabilises as US debt ceiling bill is passed
Outlook on EUR/USD, GBP/USD and EUR/GBP as the US Senate passes the debt ceiling bill.
EUR/USD rallies off two-month low
EUR/USD is seen rallying off its two-month low at $1.0636 as the US dollar declines. The US debt ceiling bill has been agreed, preventing a US default.
The break through the five-week downtrend line at $1.072 puts the $1.0789 early-April low back on the cards. Above it resistance can be found between the mid-February high and 10 April low at $1.0804 to $1.0832.
Slips should find support along the breached downtrend line and at the $1.0702 26 May low.
EUR/GBP slips to five-month low on softer Eurozone inflation
EUR/GBP’s slide to levels last traded in December of last year, on Thursday to £0.8568 on softer Eurozone headline and core inflation, is levelling out on short-covering ahead of the weekend.
With the European Central Bank’s (ECB's) tightening expectations diminishing and those of the Bank of England (BoE) remaining in play, further downside may be seen next week.
Major support between the September-to-December lows at £0.8572 to £0.8548 may thus be revisited next week.
GBP/USD surges higher on rate hike expectation differential
GBP/USD’s swift recovery off its $1.2345 to $1.2309 April-to-May support zone is gaining traction as the US dollar is starting to depreciate.
With the US debt ceiling being lifted and commentary by the Federal Reserve (Fed) officials of a possible 'skip' in the June meeting to acquire more data to get a clearer picture of the US economy being heard, the greenback is on the back foot.
A comparatively more hawkish BoE which is expected to hike again later this month due to elevated UK inflation has pushed the GBP/USD pair towards its $1.2546 mid-April and mid-May highs. Further up beckons the May peak at $1.2679. Support comes in at the 24 May high at $1.2469.
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.
