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.
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/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.
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.
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