Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
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.
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 rallies as US Dollar slips, EUR/GBP side-lined

EUR/USD rallies as US Dollar Index trades in one-month lows, EUR/GBP side-lined.

Video poster image

​EUR/USD targets the $1.0806 March low

EUR/USD’s near 4% rally from its mid-May $1.035 low has so far taken it to a one-month high at $1.0765 as the US dollar continues to weaken as Federal Open Market Committee (FOMC) minutes strike a less hawkish tone ahead of the US Personal Consumption Expenditure (PCE) price inflation data for April which is expected to come in at 0.3% as in the previous month.

With the Federal Reserve (Fed) perhaps considering a pause in its rate rises after its July meeting to assess the impact of its policy tightening, the cross is now in its second week of rallying and is about to hit the 55-day simple moving average (SMA) at $1.0774 and then the March low at $1.0806. Further up the 2022 downtrend line can be seen at $1.0823.

Minor support sits between Wednesday’s low at $1.0643 and the two-week support line at $1.064. Much further down lies Friday’s $1.0533 low.

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

EUR/GBP continues to range trade around the £0.85 mark

Earlier this week EUR/GBP stalled at £0.8587, marginally below the £0.8618 mid-May peak, before it rapidly came off again as German GfK consumer confidence data for June came in at a worse than expected -26.0 versus a revised -26.6 record low in May.

Strong support below Tuesday’s minor low at £0.848 remains to be seen along the 200-day SMA and two-month support line at £0.8445 to £0.8438.

Any intraday bounce is expected to lose upside momentum around the 16 May high at £0.8534.

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

US Dollar Index trades in one-month lows

The US Dollar Index’s (DXY) sharp rise, amid soaring inflation, heightened geopolitical tensions and growth concerns pushed it not only above the January 2017 and March 2020 Covid-19 pandemic peaks around 103.82 but also above the 104.60 July 1999 high to its mid-May high at 104.91 before slipping by nearly 3.5% in the past couple of weeks amid waning concerns over aggressive tightening by the US Fed.

The 55-day SMA and 20 April high at 100.97 to 100.92 are within sight, a slip through which could lead to the mid- to late April lows at 99.70 to 99.48 being reached before the index stabilises.

Immediate downside pressure should continue to be seen while the DXY remains below its last relative high, meaning a daily candle which has a higher high than the one to its left and the one to its right, at Wednesday’s 102.29 high.

DXY chart Source: IT-Finance.com
DXY 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.

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

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.