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The euro benefits while the US dollar is taking a dive

Euro strength pushes EUR/USD as dollar weakens.

The rally in EUR/USD continues unabated

EUR/USD continues to surge higher and is in the process of breaking out of its November-to-January channel which contained the cross until now.

The October-to-early-November lows at $1.1513 to $1.1539 are now firmly in view but are likely to put a dampener on the current advance. If not, we would have to allow for the September trough at $1.1563 to be reached as well.

Solid support can now be seen between the late-November and December highs at $1.1386 to $1.1383. While above there, upside pressure should retain the upper hand.

EUR/GBP continues to oscillate around the £0.8350 level

EUR/GBP is trying to recover from this year’s low to date at £0.8324 and is likely to reach the 55-period simple moving average (SMA) on the 240 minute chart at £0.8357. A rise above it would probably engage the £0.8366 to £0.8373 resistance area which acted as support late last year and as resistance early this year.

While the next higher early January high at £0.8418 isn’t exceeded, the longer term downtrend (in place since September of last year), remains intact.

Only a tumble through the recent low at £0.8324 would put the December 2016, April 2017, December 2019 and February 2020 lows at £0.8313 to £0.8277 on the cards. This area represents key long-term support which is expected to underpin the cross.

USD/JPY remains in free fall

USD/JPY continues to come off its early January 4-year high at ¥116.35 and drops towards the 55-day simple moving average (SMA) and mid-December high at ¥114.30 to ¥114.27, having so far reached the ¥114.44 early November high.

In case of the above mentioned support giving way, the 29 November and 8 December highs at ¥113.96 would be next in line.

Good resistance now comes in between the mid-November high and the 3 January low at ¥114.95 to ¥114.97.

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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