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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 recovers, EUR/JPY surges ahead while GBP/USD grinds higher

​​Outlook on EUR/USD, EUR/JPY and GBP/USD as the US dollar returns some of its recent gains.

JPY Source: Bloomberg

​​​EUR/USD recovers from seven-week low

EUR/USD continues to bounce off its seven-week low, made amid strong non-farm payrolls reading which saw the chances of a March rate cut by the Federal Reserve (Fed) all but disappear and led to a strong rally in the US dollar which has since dissipated.

​The cross is gradually rising towards its 1 February low at $1.078 but while it remains below the 200-day simple moving average (SMA) and the December-to-February downtrend line at $1.0832 to $1.085 stays within it medium-term downtrend.

​Minor support is seen at Thursday’s $1.0742 low and more significant support at Monday’s $1.0723 low, a slip trough which would engage the $1.0694 late October high.

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

​EUR/JPY surges ahead

EUR/JPY has seen a strong rally on Thursday amid ongoing yen weakness due to the Bank of Japan’s (BoJ) dovish stance with the November-to-February downtrend line at ¥161.19 about to be hit. If bettered, the mid-January high at ¥161.86 would be next in line.

​Minor support can be found around the ¥160.27 5 February high.

​While the early February low at ¥158.08 holds, the three-month medium-term uptrend remains valid.

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

​GBP/USD grinds higher into end of week

GBP/USD has managed to heave itself back above the 200-day SMA at $1.2563 and is heading towards this week’s high at $1.2642, a rise above which would put the 55-day SMA at $1.2673 on the map. It delineates the middle of the currency pair’s three-months sideways trading range.

​Support below Thursday’s low and the 200-day SMA at $1.2572 to $1.2653 can be spotted along the October-to-February uptrend line at $1.2544.

​While this week’s low at $1.2519 underpins, the wide sideways trading range should remain intact.

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