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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 under pressure while GBP/USD edges higher and USD/JPY stalls after recent gains​​​​​​

The euro has recovered against the dollar, though it remains under pressure. Sterling is also moving higher versus the greenback, while the dollar is holding firm against the yen.

Euro Source: Adobe images

EUR/USD falls below 200-day SMA


EUR/USD rebounded strongly on Friday, though it failed to move back above the 200-day simple moving average (SMA).

Since late September there has been a strong move to the downside, with only a brief rally earlier in October. However, this failed to move back above broken trendline support, and led to a fresh move below the 200-day SMA.

The move has wiped out most of the gains made since early August. A close back above the 200-day SMA might indicate a low has formed for the time being. August’s low at $1.0780 might offer support, while below this comes the June low at $1.0670.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

GBP/USD forms higher low


GBP/USD uptrend still looks in better shape, with positive divergence on daily stochastics providing hope of a sustained bounce.

While the price dropped below the early September low of $1.30 last week, it has since recovered. For the moment the selling appears to have been halted; the short-term bullish view remains intact unless we see a reversal back below $1.2970.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

USD/JPY stalls below ¥150.00

Having touched ¥150.00 last week, USD/JPY price now looks at risk of some short-term weakness.

Bullish momentum has faded over the past week, as noted by declining daily stochastics, though at present the sellers have been unable to gain much traction.

For the moment the price is holding above the August peak at ¥149.40; a close below this might trigger some more selling. Meanwhile bulls will be looking for a close back above the ¥150.00 level that could lead to a challenge of the 200-day SMA.

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

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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