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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

​​EUR/USD, GBP/USD and USD/JPY as Moody’s cuts US debt outlook to “negative”

​​Outlook on EUR/USD, GBP/USD and USD/JPY ahead of Tuesday’s US inflation data and amid US debt outlook downgrade.

USD Source: Bloomberg

EUR/USD remains side-lined

​EUR/USD’s minor consolidation below last week’s near two-month high at $1.0756 continues with it still remaining above its the 55-day simple moving average (SMA) at $1.0641 despite Moody’s cutting its US debt outlook from “stable” to “negative” due to a significant increase in debt servicing expenses and the presence of “entrenched political polarisation.”

​While the 55-day SMA underpins, the medium-term bullish trend remains intact. Were it to be slipped through on a daily chart closing basis, the late-September high at $1.0618 may offer support.

​For last month’s gradual advance to continue a rise and daily chart close above Thursday’s high at $1.0725 would need to be seen. Were it and Monday’s high at $1.0756 to be bettered, the 200-day SMA at $1.0803 would be eyed, together with the $1.0834 July low.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​GBP/USD tries to stem recent downside momentum

​Last week’s GBP/USD rejection by the 200-day SMA at $1.2436 has taken the cross to Friday’s $1.2188 low from which it is currently trying to recover.

​For such a bounce to gain traction not only the 55-day SMA at $1.2296 but also Thursday’s high at $1.2308 would need to be overcome. In this case the mid-October peak at $1.2337 could be back in focus.

​A drop through Friday’s low at $1.2188 would open the way for the uptrend channel support line at $1.213 to be reached.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

​USD/JPY nears October 2022 peak

USD/JPY is on track for its sixth consecutive day of gains while it is approaching its October 2022 peak at ¥151.95 as Japan inflation nears a three-year low. Producer prices in Japan rose by 0.8% year-on-year in October which was the lowest inflation since a deflation in February 2021 and marked the tenth straight month of a slowdown.

​As the currency pair continues to advance, the risk of Bank of Japan (BoJ) currency intervention is increasing by the day, especially now that the ¥151.73 late-October peak has been overcome.

​The one-week uptrend line at ¥151.45 currently underpins the cross. Below it minor support can be spotted at the ¥150.78 26 October high. Further down lies the psychological ¥150.00 mark.

USD/JPY chart Source: IT-Finance.com
USD/JPY chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG 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.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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