EUR/USD, USD/JPY and USD/CNH post ECB rate hike and amid encouraging China data
Outlook on EUR/USD, USD/JPY and USD/CNH following ECB’s rate hike and dovish outlook while China data surprises to the upside.
EUR/USD trades in 3 ½ month lows post ECB rate hike and dovish outlook
EUR/USD briefly slid below its $1.0636 May low on Thursday following the European Central Bank’s (ECB) tenth rate hike in a row to 4.00% on its deposit rate and its dovish outlook.
A drop through and daily chart close below Thursday’s low at $1.0632 could lead to a tumble towards the January and March lows at $1.0516 to $1.0484 taking place.
For now, the cross seems to hold, though, and while it does, last week’s low at $1.0687 may be revisited. Provided the currency pair remains below the last reaction high at $1.0769, seen on Tuesday, the July-to-September downtrend remains very much intact.
USD/JPY nears its 10-month high
There is no stopping USD/JPY's ascent with the cross approaching its 10-month high at ¥147.87.
A rise above this level could lead to a move towards the ¥150.00 region where the Bank of Japan (BoJ) is expected to intervene, though.
Immediate upside pressure should be maintained while USD/JPY stays above its July-to-September uptrend line at ¥146.92. While Monday’s ¥145.91 low underpins, the July uptrend remains valid.
USD/CNH consolidates below 11-month high
USD/CNH’s sell-off from its 11-month high at CN¥7.3681 last Friday, made marginally below its October 2022 peak at CN¥7.3773, has taken it back towards its early-September low at CN¥7.2392. China retail sales growth at three-month highs and its industrial output growth beating estimates have helped to push the cross lower.
The next downside target is the 55-day simple moving average (SMA) at CN¥7.2444 ahead of the CN¥7.2392 low. Only if the latter were to be slipped through on a daily chart closing basis, would an interim top be formed.
Minor resistance can now be spotted around the CN¥7.3106 late-August high.
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.
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. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
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
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
