Flight-to-safety flows into the US dollar push EUR/USD, GBP/USD lower and USD/JPY higher
Outlook on EUR/USD, GBP/USD and USD/JPY amid ongoing US debt ceiling negotiations and as Germany enters a technical recession.
EUR/USD slips to two-month low as Germany enters a recession
EUR/USD’s decline has taken it to a two-month low on flight-to-safety flows into the US dollar due to ongoing US debt ceiling negotiations and as Germany, having seen two consecutive quarters of negative growth, technically enters a recession.
The cross nears the 24 March low at $1.0714 below which sits the early-March high at $1.0695.
Resistance continues to be seen at last week’s $1.076 low and then around the $1.0789 early-April trough. While the next higher 10 April low at $1.0832 isn’t overcome, downside pressure should retain the upper hand.
GBP/USD remains under pressure amid ongoing US debt ceiling negotiations
GBP/USD’s descent is threatening to slip through its $1.2345 10 April low as the US dollar scales over two-month highs.
If the currency pair were to make a daily chart close below this level, the mid-February high and early-April low at $1.2275 to $1.227 would be targeted next.
Immediate resistance can be spotted all the way up to the 25 April low at $1.2387, above which meanders the 55-day simple moving average (SMA) at $1.2403 which also offers potential resistance.
USD/JPY hits a new six-month high
USD/JPY continues its ascent as investors were spooked by Fitch’s move to put the US on “negative watch”, prompting the greenback to rally further on flight-to-safety flows.
So far, the currency pair has risen to a six-month high with the ¥139.89 late-November peak about to be reached. Together with the minor psychological ¥140.00 region, it may well cap this week.
Support is seen along the one-month uptrend line and last week’s high at ¥138.75. More important support can be found between the March and early-May highs at ¥131.91 to ¥137.77.
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.