US data bolsters USD/JPY while weakening EUR/USD and GBP/USD
Healthy data from the US in the form of jobs data and the ISM services purchasing managers index (PMI) have strengthened the dollar, and USD/JPY has bounced from the 200-day SMA as a result.
EUR/USD drops back below $1.05
EUR/USD's rally continues, although it has encountered some weakness as the dollar has strengthened.
For now the bounce from late September is firmly intact. Buyers have come in to create higher lows and higher highs, and with the move above the 200-day simple moving average (SMA) the outlook has turned more positive for the pair.
Additional upside targets the $1.063-$1.078 area, marking the May highs. A reversal below $1.02 might suggest a return of the downtrend of 2022.
GBP/USD still in uptrend
GBP/USD has crossed the 200-day SMA, and while it fell back yesterday there is still room for further upside.
Fresh gains may target $1.236 and then $1.266, with the near-term view remaining bullish unless the price reverses back below $1.20.
A more sustained decline below $1.16 would be needed to suggest that the bounce has moved from consolidation to fresh decline, which may see the price head back towards $1.12 in the short term.
USD/JPY rallies from 200-day SMA
USD/JPY bounce from the 200-day SMA marks an interesting development, though it is too soon to suggest that a low is in.
Additional gains from here target ¥140.00 with the price hitting trendline resistance from the October high around this level. Beyond this the late November high at ¥142.20 comes into play, and a move above this helps to rebuild a bullish view.
A failure to move on above ¥140.00 leaves the bearish view intact, and might result in a fresh test of the 200-day SMA.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa 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
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
