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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 in near one-month, EUR/GBP in three-month highs while USD/JPY slips lower

EUR/USD and EUR/GBP continue their advance as high inflation puts the ECB under pressure to start tightening its monetary policy while USD/JPY gives back some of its recent gains amid a weaker US dollar.

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​EUR/USD trades in near one-month highs

EUR/USD has risen above its $1.1137 mid-March high and is fast approaching the 55-day simple moving average (SMA) at $1.1199 in the wake of the highest German inflation reading since 1990 at 7.3%, putting the European Central Bank (ECB) under pressure to start tightening its monetary policy.

Further up resistance sits at the $1.128 mid-February low.

Minor support comes in between the January low, 10 and 17 March highs at $1.1137 to $1.1122. Slightly further down sits the 24 February low at $1.1107.

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

EUR/GBP trades in three-month highs above the £0.8478 to £0.8458 support zone

EUR/GBP’s swift ascent has taken it to a three-month high at £0.8512 earlier today on the back of renewed buying interest in the Euro as markets continue to price in tighter monetary policy conditions.

The cross is likely to revisit the £0.8478 to £0.8458 support zone which incorporates the February and mid-March highs as well as the 200-day SMA. As such it is expected to hold today. If not, the late January high at £0.8422 would be back in the frame.

Above today’s high at £0.8512 lies the late December high at £0.8554.

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

USD/JPY continues to give back recent gains

On Monday USD/JPY briefly overshot the June 2007 high at ¥124.13 and rallied to ¥125.10, to not far below the June 2015 peak at ¥125.85, before giving back some of its recent gains on the back of a weaker US dollar, due to the slightly better Ukraine/Russia backdrop.

The cross became increasingly overbought as it had risen by over +8% since the beginning of March as the Bank of Japan (BoJ) re-iterated its dovish stance despite inflation hitting 3-year highs while the US Federal Reserve (Fed) is seen hiking rates by 50 basis points (bp) at the next two Federal Open Market Committee (FOMC) meetings to contain sky-high US inflation.

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

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