EUR/USD at risk of declines, while GBP/USD and USD/JPY rally

EUR/USD has dropped to a two-week low, while GBP/USD and USD/JPY have continued to enjoy strong gains.

EUR/USD at risk of heavy losses

The price action over the past two weeks has carried EUR/USD back to the lows of early November around $1.10. The price has yet to break below this zone of support, but if the overnight rally from yesterday’s lows runs out of steam then we could see this level tested.

Short-term trendline resistance comes into play around $1.1015, while a bearish crossover on hourly stochastics would also provide a sell signal. For the moment, the sequence of lower highs this week provides a bearish view.

GBP/USD rallies towards one-month high

The YouGov seat projection has provided a sharp boost for sterling, helping to reverse a growing bearish impression over the past week. GBP/USD has rallied through trendline resistance from last Thursday’s highs, and has pushed above the lower high from 25-26 November.

Further gains require a sustainable breakout above $1.2976, which has held back gains since mid-October.

USD/JPY returns to key resistance

USD/JPY continues to climb, and has been the beneficiary of fresh bullish momentum over the past week. Now it must break above ¥109.55 to clear resistance and open the way to ¥110.34 and long-term trendline resistance from the September 2018 highs.

With the US out of the picture we may see some further weakness, but this is likely to be a buying opportunity unless the price breaks back below ¥108.50.

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
liveprices.javascriptrequired
liveprices.javascriptrequired

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

liveprices.javascriptrequired

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.