EUR/USD and GBP/USD drop while USD/JPY rallies on stronger US dollar
Outlook on EUR/USD, GBP/USD and USD/JPY following weak French and German flash PMI and Thursday’s BoE 50 basis point rate hike.
EUR/USD reverses trend around $1.1000 mark
EUR/USD’s rally to its six-week high at $1.1012 has been short-lived with the cross not only slipping through its June uptrend line at $1.0922 but also the 55-day simple moving average (SMA) at $1.0885 as French and German flash purchasing managers indices (PMI) for June come in worse-than-expected.
A potential downside target is the 22 May high at $1.0832 below which lies the $1.08 region. Resistance above the 55-day SMA lies at Tuesday’s $1.0892 low.
GBP/USD slips despite BoE 50 basis point rate hike
GBP/USD briefly shot back up towards last week’s $1.2848 14-month high as the Bank of England (BoE) hiked its rates by 50 basis points (bp) for a thirteenth time to 5.00% but then came off again as investors started to fret about the impact these hikes might have on the UK economy.
The breached one-month uptrend line at $1.2749 acted as resistance on Friday morning with Wednesday’s low at $1.2692 being back in sight. If slid through, the $1.2679 May peak which may offer support. If not, a drop back towards the $1.2599 to $1.2544 early- to mid-June highs may unfold.
USD/JPY rallies in seven-month highs
USD/JPY continues to surge higher as Japanese inflation unexpectedly falls. The annual inflation rate declined to 3.2% in May with core inflation also slipping to 3.2%.
The cross has now overcome its the late November 2022 peak at ¥142.25, which may act as minor support, and is seen heading up towards the ¥145.00 region. Minor support below ¥142.25 lies at this week’s low at ¥141.22 and at the ¥140.93 May peak.
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
- Forex
- Shares
- Indices
