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EUR/USD, GBP/USD and USD/JPY extend rebounds

Recoveries are underway in key FX pairs, with EUR/USD and GBP/USD having found support. USD/JPY is however approaching a critical juncture after recent gains.

EUR/USD steadies above $1.16

The EUR/USD pair appears to have found a floor for the time being at $1.16. Further gains now target trendline resistance from the September peak, bringing $1.175 into view.

Above this the next area to watch is $1.19, which held back progress in the middle of September. A reversal below $1.16 revives the bearish view.

GBP/USD marches higher

Despite mixed messages on Brexit and negative rates yesterday the GBP/USD pair has continued to rise from the $1.27 level. Further gains target the 50-day simple moving average (SMA) at $1.3026, this indicator having denoted the high water mark in the rally earlier in the month.

Having cleared trendline resistance from the September peak yesterday the buyers appear to be in control, with a drop back below $1.277 needed to hand the initiative back to the sellers.

USD/JPY rebound nears 50-day SMA

The bounce here has carried the price back towards the declining 50-day SMA (¥105.80) for USD/JPY. Since the second half of July this indicator has acted as a battleground for buyers and sellers, with the latter winning out in the end.

Gains have stalled as the price has climbed above ¥105.50, suggesting heavier going from here for the buyers. A drop below ¥105.20 could signal that a new downward leg has begun.

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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