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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 recovers on hopes of Eastern European de-escalation, EUR/GBP down and GBP/USD up on sterling strength

EUR/USD advances on waning war jitters while EUR/GBP slips and GBP/USD rises on Boris Johnson's announcement to remove all Covid-19 restrictions.

EUR/USD rises on hopes of Biden-Putin summit

EUR/USD is seen heading back up again after the US President Biden and the Russian President Putin agreed in principle to meet to discuss the Ukrainian crisis.

On the back of this news EUR/USD bounced off the 55-day simple moving average (SMA) and one-month support line at $1.133 to $1.1314 and is advancing towards the late November, December and last week’s highs at $1.1382 to $1.1396. This area will need to be exceeded, for the January and current February highs at $1.1482 to $1.1495 to be back in the frame.

​Only a slide through minor support at today’s $1.1314 low could lead to last week’s low at $1.1281 and the early January low at $1.1272 being revisited.

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

The gradual EUR/GBP slide is ongoing

EUR/GBP continues to give back most of its early February swift advance in view of recent sterling strength, benefitting from a Covid-19 post-Omicron growth rebound and expectations for further Bank of England (BoE) interest rate hikes.

The mid-January trough at £0.8324 is currently being tested, below which beckons major support which remains to be seen between the January and early February lows at £0.8305 to £0.8286.

Minor resistance above the one-month resistance line at £0.8369 can be spotted at the £0.8381 November low and also at last week’s £0.8402 high and 55-day SMA at £0.8406.

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

GBP/USD trades near four-week highs

Last week’s strong GBP/USD bounce off the $1.3513 to $1.349 mid-November high, 6 January and 7 February lows, has taken it to a one-month high close to the current February high at $1.3644. This is on the back of the pound sterling strengthening amid expectations for further BoE interest rate hikes and the removal of all remaining Covid-19 restrictions in England, fully opening up the economy.

The 200-day SMA at $1.3687 represents the first technical upside target, followed by the January peak at $1.3749.

Only a currently unexpected fall through last week’s $1.3487 low, would put the $1.348 to $1.3431 support zone back into the picture. It is comprised of the early as well as the 25 and 26 January lows and the 55-day SMA. Further down lies the January trough at $1.3359.

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