EUR/USD, GBP/USD and USD/JPY all turn lower
Risk aversion has hit FX markets, with a flight to safety taking place, resulting in swift reversals in a number of currency pairs.
EUR/USD break higher suffers sharp reverse
A revival in the US dollar resulted in EUR/USD’s bounce being reversed yesterday, and with the price back below the 50-day simple moving average (SMA) of $1.2154 and daily stochastics rolling over the bearish view has been given a new lease of life, at least in the short term.
In the first instance we have rising trendline support from the February lows that may provide support, and then below this the 100-day SMA at $1.202. A move back above $1.22 negates this bearish view.
GBP/USD drops for a second day
The selling in other markets has hit GBP/USD, wiping out most of the move of the past week that carried the price to $1.42.
Further declines now seem likely, towards the rising 50-day SMA at $1.37, bringing the price back to this key zone that provided some volatility on the way up.
USD/JPY reverses from higher high
The USD/JPY price has pulled back from its latest higher high, leaving the uptrend firmly in place.
Further declines would target ¥105.50, the 200-day SMA, and then down to ¥105.00 and the low from earlier in the week. A bounce back above ¥106.40, around yesterday’s highs, would put the buyers firmly back in charge, but for now we will have to watch to see if there is any recovery from the early weakness, or whether more losses are on the way.
This information has been prepared by IG, a trading name of IG Markets 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.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets