EUR/USD and GBP/USD likely to decline as USD/JPY breaks resistance

EUR/USD and GBP/USD expected to turn lower, as USD/JPY breaks resistance to bring bullish reversal signal.

EUR/USD continues to drift down towards key support level

EUR/USD continues to grind lower, with the pair losing traction as money flows back into those currencies that could benefit from monetary tightening in the coming months.

Price has pushed up towards trendline resistance once again overnight, bringing expectation of another move lower today. Ultimately, a break back below the $1.1235 level would be required to end the recent upward phase, building greater confidence in a continuation of the wider bearish trajectory.

GBP/USD expected to weaken after tentative gains

GBP/USD has rallied up into trendline resistance overnight, with the pair failing to gain traction starting to lose traction in the early hours of this morning.

The intraday trend of lower highs does signal a likely bearish turn from here, with a rise through $1.331 required to bring a more positive short-term outlook. Until then, this pair looks likely to turn lower once again.

USD/JPY breaks through resistance to bring bullish outlook

USD/JPY has managed to break up through the ¥113.61 resistance level overnight, bringing about a bullish signal after a period of weakness for the pair. That recent decline into trendline support came after markets considered the dovish implications for the Federal Reserve (Fed) if Omicron turned out to result in global lockdowns.

However, tentative signs of optimism over the mild effects of the Covid-19 virus have helped lift sentiment for this pair. Keep an eye out for future Omicron announcements to impact sentiment for the Fed and thus USD/JPY. This break up through ¥113.61 brings us a fresh bullish outlook, with a recovery of the late-November losses looking

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

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

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

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.