EUR/USD and EUR/GBP stabilise while GBP/JPY slips
EUR/USD and EUR/GBP recover from Thursday’s drops while GBP/JPY tumbles.
EUR/USD holds above key support zone
EUR/USD managed to break its fall slightly above the $1.036 to $1.035 May and current June lows by dropping to $1.0383 yesterday before recovering as the European Central Bank (ECB) kicks off its rebalancing programme to prevent financial fragmentation among euro zone countries.
Minor resistance at the April low at $1.0471 is expected to be retested. Above it there is no resistance to speak of until the 55-day simple moving average (SMA) and mid- to late June highs at $1.0595 to $1.0615. While it caps, overall downside pressure should be maintained.
Failure at $1.035 may lead to a slide towards parity being seen.
EUR/GBP is seen heading back up again
EUR/GBP is seen heading back up towards its £0.8618 May high, following yesterday’s Hammer formation on the daily candlestick chart which was formed as the UK’s trade performance dropped to its lowest level since the beginning of the year, with imports surging while exports dwindled.
Above £0.8618 lurks Wednesday’s £0.8661 high while minor support can be spotted between the late May and early June highs at £0.8592 to £0.8588 with more significant support being found between the 24-June low, three-month support line and yesterday’s low at £0.8562 to £0.8551.
Resistance above £0.8661 can only be seen at the currency pair’s one-year mid-June high and the 200-week SMA at £0.8721.
GBP/JPY rapidly declines again
The sell-off in GBP/JPY from its 24-June high at ¥167.91 is accelerating despite Japan business sentiment slipping further in the second quarter (Q2). The Tankan Manufacturing Index dropped to nine in Q2 versus an expected 13 and 14 in the previous quarter, hit by the war in Ukraine, China’s Covid-19 lockdowns, supply disruptions and rising input costs.
The cross is seen sliding towards its two-month support line at ¥161.95 with minor resistance being found at the 23-June low at ¥164.66. Further up sits the 17-June high at ¥166.22.
From a technical point of view a fourth Elliott Wave seems to be in the making with its low coming in at ¥160.00 with a final fifth Elliott wave to the upside to eventually be seen. It should take the cross to above its April and current June highs at ¥168.43 to ¥168.73 towards the ¥170.00 zone and above. On the way up, resistance comes in at the 21-June high at ¥167.91.
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.
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