FX snapshot – GBP/USD, EUR/USD, AUD/USD, USD/JPY

The US dollar has found new life, helped by Janet Yellen’s hints that December is a very real possibility for a rate hike by the Federal Reserve.

Janet Yellen holding her glasses
Source: Bloomberg

GBP/USD slips following Yellen comments

With cable back below $1.54 it looks like we may be seeing the beginning of a major move lower, but first the sellers need to push us back below $1.5360, where the declines have been stemmed all the way through this week. A move through there is needed before the sellers really have the upper hand. Should this occur, then the $1.5313 and then $1.5266 levels become the areas to watch for support. A break back above $1.54 needs to clear $1.5450 to avoid simply replicating the consolidation that has prevailed this week.

GBP/USD chart

EUR/USD off lows but could fall further

More losses were the order of the day for EUR/USD yesterday, but for now the pair is off the lows. Continued moves to the downside target $1.0769, with some support possible around the July lows at $1.0808. If the pair does bounce then the first area of resistance is $1.0938, followed by the $1.11 area. With the US dollar in vogue once again thanks to Janet Yellen yesterday, the most likely course still seems downward.

EUR/USD chart

AUD/USD decline continues

The $0.7220 level was the key area of resistance earlier in the week, with a failure to break through here sparking a drop that continued yesterday and looks to be continuing today. A move through $0.7120 would clear the way towards the lows of late October around $0.7060. Buyers need to get the pair back above $0.7180 to consider a more bullish stance, with the most important element being a break back through $0.7220. 

AUD/USD chart

USD/JPY targets ¥122.80

Steady gains have been the norm here over the past three days, with a particularly elegant trend in place since early Tuesday morning. The pair has pushed through yesterday’s high, but needs really to move on through ¥121.82 to confirm this development. Upside targets now lie around ¥122.20 and then ¥122.54, with a break above here meaning that we are likely to test the August highs around ¥125. It would need a move back below ¥121 to suggest the bounce has run its course. 

USD/JPY chart

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.

Find articles by analysts