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CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

EUR/USD and USD/JPY hover above this week’s lows while EUR/GBP slips

​​Outlook on EUR/USD, EUR/GBP and USD/JPY in quiet trading.

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​​​EUR/USD stabilises in low volatility trading

EUR/USD's swift sell-off from last week’s $1.1033 high to this week’s $1.067 low came to a sudden halt as the US dollar rallied on the back of much stronger-than-expected US employment data on Friday.

​The cross has been trading in a low volatility range these past few days and is slowly rising on Thursday morning as Germany’s inflation rate rises less than expected. It edged up to 8.7% in January versus 8.6% in December, but below a market forecast of 8.9%. Month-on-Month (MoM) it increased by 1%, reversing a 0.8% decrease in December, when a federal one-off gas and heat payment for all households and small- to medium-sized businesses was introduced and kept inflation at bay.

​The 55-day simple moving average (SMA) and Tuesday’s low at $1.0679 to $1.067 now act as support and as long as it holds, a recovery back to the mid-January low at $1.0766 may ensue. Above it sits the late January low at $1.0802. Failure at $1.067 could lead to a slip towards the $1.0574 mid-December low being seen.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​EUR/GBP slips back towards late January high at £0.8852 ahead of UK Q4 GDP data

EUR/GBP's three-day slide from last week’s high at £0.8978 is fast approaching the 25 January £0.8852 high, ahead of Friday’s UK Q4 preliminary gross domestic product (GDP), industrial production and trade balance data.

​Below it a tentative support line can be found at £0.8809. Immediate resistance sits between the £0.8877 and £0.8897 late December and January highs.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

​USD/JPY hovers above this week’s low at ¥130.48

​The surge higher in the USD/JPY cross on the back of a rallying US dollar - following the 517k jobs created in the US economy - ran out of steam at Monday’s ¥132.90 high, marginally below the 55-day SMA, now at ¥132.75, with it dipping back to Tuesday’s ¥130.48 low, above it has been trading since.

​The odds favour further downside being seen as the currency pair remains in a downtrend with the ¥129.52 early January low being eyed on a slip through the 20 December low at ¥130.58 and this week’s low at ¥130.48. Further down the early January low can be spotted at ¥127.23 and lie the late April and May 2022 lows at ¥126.95 to ¥126.36.

​Strong resistance above ¥132.90 can be found between the early December low at ¥133.63 and the late December and January high at ¥134.50 to ¥134.77. The medium-term downtrend will remain in play while the latter level isn’t overcome on a daily chart closing basis.

USD/JPY chart Source: IT-Finance.com
USD/JPY chart Source: IT-Finance.com

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.

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