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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

EUR/USD and EUR/GBP remain bid while greenback nears support

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

EUR/USD struggles around the 55-day simple moving average

EUR/USD’s near 4% rally from its mid-May $1.035 low has so far taken it to a one-month high at $1.077 as US core personal consumption expenditure (PCE) price inflation continues to slow down. The cross seems to be struggling around the 55-day simple moving average (SMA) at $1.077 as US markets are shut due to Memorial Day with quiet trading expected to be seen in currency markets today.

With the Federal Reserve (Fed) considering a pause in its rate rises after its July meeting to assess the impact of its policy tightening, the cross may continue to gradually advance towards the March low and February-to-May downtrend line at $1.0806 to $1.0816 which is likely to cap.

If not, the late-April high at $1.0936 would be next in line. Minor support continues to be seen between the three-week support line and last Wednesday’s low at $1.0668 to $1.0643.

EUR/GBP continues to oscillate around the £0.85 mark

EUR/GBP faltered at £0.8587, last week, marginally below the £0.8618 mid-May peak, before it rapidly came off following record low German GfK consumer confidence data. Last week’s low at £0.848 held throughout the week, though, with the cross heading back up again today, following a long Ascension Day holiday weekend in Catholic Europe.

The 16 May high at £0.8534 is back in the picture, a rise above which would lead to the £0.8587 to £0.8618 resistance area being revisited.

Support below the recent £0.8480 low can be found between the two-month support line and the 200-day SMA at £0.845 to £0.8445.

US Dollar Index nears the 55-day simple moving average

The US Dollar Index’s (DXY) swift two-week decline from its $104.91 mid-May high is losing downside momentum slightly above the 55-day SMA at $101.01 and the late-April high at $100.92 as investors are becoming increasingly hopeful that the Fed might not raise rates as aggressively as previously anticipated.

The $101.01 to $100.92 region is expected to offer support this curtailed week with the US enjoying a long weekend due to its Memorial Day holiday. Further down lies strong support in the $99.7 to $99.46 region, consisting of the March high, mid- and 21 April lows.

Minor resistance above the two-week downtrend channel resistance line at $101.81 comes in between the 5 May low and 25 May high at $102.25 to $102.29. Only a rise above this minor resistance area would indicate that the previous uptrend has resumed.

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. See full non-independent research disclaimer and quarterly summary.

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