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​​​EUR/GBP, GBP/USD and USD/JPY in the wake of softer US and UK inflation

​​Outlook on EUR/GBP, GBP/USD and USD/JPY as an increasing number of investors re-appraise their US dollar positioning.

EUR/GBP Source: Bloomberg

​​​EUR/GBP nears six-month high

EUR/GBP has resumed its recent ascent following softer UK inflation with last week’s £0.8755 six-month high being revisited. If bettered, the mid-April low at £0.8791 may represent the next upside target.

​Support below the 20 October high at £0.874 comes in around the £0.8706 to £0.8701 July and September highs.

While the next lower Tuesday low at £0.8689 holds, the short-term uptrend remains intact.

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

​GBP/USD slips on softer UK inflation

GBP/USD is seen trading back below the 200-day simple moving average (SMA) at $1.2442 after its foray to $1.2506 on weaker-than-expected US inflation and a falling US dollar, now that UK inflation also came in softer than anticipated on Wednesday.

​The mid-October peak at $1.2337 may thus be revisited but could offer interim support. Further down minor support can be spotted at the $1.2288 late-October high and along the 55-day SMA at $1.2283. While the next lower $1.2188 low from last Friday doesn’t give way, the October-to-November gradual uptrend will remain intact, though.

Resistance is found along the 200-day SMA at $1.2442 ahead of Monday’s $1.2506 high.

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

​USD/JPY heads back up towards the October 2022 peak

USD/JPY took a hit following a weaker-than-expected US inflation reading on Tuesday but formed another minor interim bottom at ¥150.05 on Wednesday before heading back up towards its October 2022 peak at ¥151.95.

​Since the current advance is accompanied by negative divergence on the daily Relative Strength Index (RSI) and as the cross nears the October 2022 peak, the risk of Bank of Japan (BoJ) currency intervention over the weekend is once again increasing.

​A slip through this week’s low at ¥150.05 would eye the late-October and early-November lows at ¥149.20 to ¥148.81. Further down lies the early-October low at ¥147.29. Were the October 2022 peak at ¥151.95 to be overcome, levels traded in June 1990 would be back in play such as the April 1990 peak at ¥160.35.

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 Australia Pty Ltd. 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.

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