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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/GBP hovers above five-month low, AUD/USD above three-month low while USD/JPY rallies

​​Outlook on EUR/GBP, AUD/USD and USD/JPY as BoJ remains cautious regarding rate hike later this year.

USD/JPY Source: Bloomberg

​​​EUR/GBP once more hovers above its five-month low

EUR/GBP's attempt to bounce off its £0.8514 five-month January low to Monday’s £0.8572 high was short-lived with the cross once again hovering above its January low.

​Minor resistance now sits at the £0.855 December low and the 1 February high at £0.8559, followed by more significant resistance at Monday’s £0.8572 two-week high.

​A now more likely fall through £0.8514 would engage the significant July-to-August lows at £0.8504 to £0.8493 below which lies the April 2021 low at £0.8472. A currently unlikely rise above £0.8572 would put the 9 January low at £0.8587 on the map, ahead of the 55- and 200-day simple moving averages (SMA) at £0.8601 to £0.8623.

EUR/GBP chart Source: IT.Finance.com
EUR/GBP chart Source: IT.Finance.com

AUD/USD continues to range trades above its near three-month low

​AUD/USD’s descent from its five-month December peak at $0.6871 has taken the cross to Monday’s low at $0.6469 before the Reserve Bank of Australia (RBA) held its base rate at 4.35% as anticipated but hinted that a further rate hike may need to be made in order to keep inflation in check.

​This led to a minor bounce to Wednesday’s $0.654 high in low volatility trading around which it now hovers. Further resistance is seen along the December-to-January downtrend line and 200-day SMA at $0.657 to $0.6573. While it isn’t overcome, further downside is probably in store.

​A fall through $0.6469 would target the 11 October high at $0.6445, ahead of the August, early September and mid-November 2023 lows at $0.6365 to $0.6339.

AUD/USD chart Source: IT.Finance.com
AUD/USD chart Source: IT.Finance.com

​USD/JPY rallies as Japanese current account surplus comes in below forecast

USD/JPY is heading back up towards its January and current February highs at ¥148.80 to ¥148.89 above which lurks the minor psychological ¥150.00 mark as the Japanese current account surplus comes in below expectations and the Bank of Japan (BoJ) governor Kazuo Ueda re-iterates his cautious stance regarding a rate hike later this year. Immediate upside pressure should be maintained while Wednesday’s low at ¥147.62 underpins on a daily chart closing basis.

​Below it the December-to-February uptrend line can be seen at ¥147.93 and at the 31 January ¥147.90 high. The medium-term uptrend will remain intact while the current February low at ¥145.90 holds.

​Were a currently unexpected slip through ¥145.90 to be witnessed, though, the 55- and 200-day SMA at ¥145.58 to ¥144.86 could be reached.

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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